Open thread, July 28 - August 3, 2014

polymathwannabe

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If it's worth saying, but not worth its own post (even in Discussion), then it goes here.

Notes for future OT posters:

1. Please add the 'open_thread' tag.

2. Check if there is an active Open Thread before posting a new one.

3. Open Threads should be posted in Discussion, and not Main.

4. Open Threads should start on Monday, and end on Sunday.

Large-scale catastrophe (consult your local relevant government agency, such as , buy insurance for non-global events)

I believe that some foreign large-scale catastrophes could also negatively impact one’s well-being. Extreme example: imagine if everyone in the world suddenly died except the citizens of your country. Psychological toll aside, your country’s necessary transition from international trader to autarky would be painful. Losing trading partners = losing ability to specialize = reducing economic efficiency = falling wages.

The reinsurance markets often deal in the risks of the disastrous. Maybe you can evaluate reinsurance offering documents and prices in order to extract the market’s implied probability of similar events.