I'm having a moment of doubt as to whether the yield curve calls for a model. Models are useful when you have lots of people dealing with local versions of the same phenomenon over and over. The higher frequency and more standardized and numerous something is, the more it calls for automation. But there is only one US yield curve. And the factors influence it at such a slow pace, you don't lose much by assigning an actual person to spend his whole day following it. And what the benefit of making a model which he can transmit to other people is, and teach to the masses, is not clear to me.So much of science is great because it equips people to deal with situations, with the benefit of the experience, and the trial and error of others. But suppose you play the saxophone. Is the best song you can compose, a song which every music student at every university can be taught to play? It seems like you might throw away an opportunity, when your composition must take the form of a training manual. If you limit yourself to inventing things in a teachable form, you limit your invention to things that can be taught.Maybe there should be a longer time between invention, and reduction to a reproducible system. In other words, coming up with the idea, and then being able to codify the idea, might be years apart. An understanding of the yield curve could precede an ability to put it into math by years. Many people are at the tops of their professions for years, and still wouldn't be able to write a book telling how to do what they do. Getting it in teachable form is less important than getting it right, unless creating it in teachable form is the best way to work on it.
Last edited by farmer
on March 5th, 2006, 11:00 pm, edited 1 time in total.