FireCalc = Monte Carlo simulator

[DW]

http://www.fpanet.org/journal/betweentheissues/essays/071506.cfm

This article in the FPA Journal analyzes the results of FireCalc as an example of a Monte Carlo simulator. I guess I don't know enough about the inner workings of FireCalc. Does it actually perform a Monte Carlo analysis?

 

[dory36]

The author points out that FIRECalc uses historical, not random data. But for all practical purposes, yes, it's a Monte Carlo calculator. The historical data is certain not to repeat, but it serves as a useful proxy for random numbers that are "realistic" because we don't have to make assumptions about year-to-year correlations (etc.) that are needed for a good monte carlo tool.