lose gains from specialization. Need for robustness comes from our limited knowledge. Rational dealing with uncertainty …Economic uncertainty has to do with the consequences of actions under different circumstances. This raises two … distinguish between environments? Robustness comes at the price of targeting actions less narrowly to specific conditions, so we …

The distinction of risk vs uncertainty as made by Knight has important implications for policy selection. Assuming the …’s decision on how to allocate loans, the authors discuss policy insights for decision making under Knightian uncertainty. They … be interpreted as a cost of robustness. They show that the robustness analysis can lead to a reversal of policy …

Uncertainty in economics is generated by “nature” but also by the model we use to “produce the future”. The production … argues that an appropriate model for dealing with uncertainty keeps the knowledge required by the model from its user in line …