Wednesday, July 21, 2010

Unusually Uncertain

Ben Bernanke (Federal Reserve Chair) testified today about the "unusually uncertain" economic prospects. That's alot of "U" s and "Un" s. As a statistician, I have been intrigued with uncertainty (or risk). Measuring uncertainty comes in two parts - Type A - those variable that can be measured from statistical methods and Type B - those variables that are assigned a probability distribution.

So how do we measure the added comment unusually? That's where the UN come IN. UNusual is the opposite of USual - that which is common or regularly observed (normal). In a bell curve that would be the center of the curve - average. Or should we be talking about the mode - most frequently observed?

I'm uncertain :) - which is usual.

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