This paper is a revised version of a keynote address delivered at the inaugural International Industrial Organization Conference in Boston, April 2003. I argue that new econometric tools have facilitated the estimation of models with realistic theoretical underpinnings, and because of this, have...

The usage of machine learning in finance has been increased a lot in the past decade. Machine learning is a new methodological innovation. Finance uses many machine learning methods (supervised, unsupervised, reinforcement learning, and others) to solve fundamentally different problems than...

Energy system models are increasingly used to identify climate change mitigation measures. Crucially, such models require future cost estimates, which depend on both technological advancement and investments. In global models, which encompass the whole world, this can be implemented via learning...

Newsboy problem is one of the most widely discussed inventory control problems. We start with a generalisation of the newsboy problem for critical perishable commodities, where the shortage and excess are of much higher importance than merely the quantity lost. In particular, we develop the...

This article discusses various challenges in the specification and implementation of \\"macro-finance\\" models in which macroeconomic variables and term structure variables are modeled together in a no-arbitrage framework. The author classifies macro-finance models into pure latent-factor...