Extreme Events and Extreme Value Theory (EVT) [5]

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Bullet points include: DON’T FORGET YOUR OWN PRECONCEPTIONS. Asserting that something exhibits fat-tailed behaviour requires us to have some prior view about what it might otherwise ‘reasonably’ be expected to do. E.g. is a 2 year old an ‘outlier’ because he/she is much shorter than the average of the general population? Not really, growing taller as you grow up is natural. With time series analysis such views are heavily influenced by time period for which data is available. And therefore by our perception about whether secular trends are at work

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