Beyond comparative statics

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It is sometimes said that when your only tool is a hammer every problem looks like a nail. That is a rather picturesque way of saying that, to a greater or lesser extent, we all tend to be prisoners of our personal training and experience. In the past 15 to 20 years, financial risk managers have built elaborate and complex simulation systems to evaluate the impact of short-term movements in market variables. Driven first by the desire for some consistent means of comparing as well as aggregat

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