Search results
Results From The WOW.Com Content Network
In economics, a random utility model (RUM), [1] [2] also called stochastic utility model, [3] is a mathematical description of the preferences of a person, whose choices are not deterministic, but depend on a random state variable.
Stochastic: The models take into consideration the transmission of random shocks into the economy and the consequent economic fluctuations. General : referring to the entire economy as a whole (within the model) in that price levels and output levels are determined jointly.
This page is concerned with the stochastic modelling as applied to the insurance industry. For other stochastic modelling applications, please see Monte Carlo method and Stochastic asset models. For mathematical definition, please see Stochastic process. "Stochastic" means being or having a random variable.
An econometric model specifies the statistical relationship that is believed to hold between the various economic quantities pertaining to a particular economic phenomenon. An econometric model can be derived from a deterministic economic model by allowing for uncertainty, or from an economic model which itself is stochastic. However, it is ...
A stochastic program is an optimization problem in which some or all problem parameters are uncertain, but follow known probability distributions. [1] [2] This framework contrasts with deterministic optimization, in which all problem parameters are assumed to be known exactly. The goal of stochastic programming is to find a decision which both ...
Stochastic optimization (SO) are optimization methods that generate and use random variables. For stochastic optimization problems, the objective functions or constraints are random. Stochastic optimization also include methods with random iterates .
According to whether all the model variables are deterministic, economic models can be classified as stochastic or non-stochastic models; according to whether all the variables are quantitative, economic models are classified as discrete or continuous choice model; according to the model's intended purpose/function, it can be classified as quantitative or qualitative; according to the model's ...
In the case of a unit root, stochastic shocks have permanent effects, and the process is not mean-reverting. With a deterministic trend, the process is called trend-stationary, and shocks have only transitory effects, with the variable tending towards a deterministically evolving mean. A trend-stationary process is not strictly stationary but ...