Why doesn RSP model uncertainty in inflation?
It should, but we haven’t decided on a model that we are happy with, yet. There are problems: returns will be correlated with inflation, and differently for the various asset classes. There are other modeling problems, such as more difficult conversion of nominal dollar results back to inflation-adjusted, since we’ll have to keep track in the program of what inflation was in each year, in each replication. For now we recommend just use a safe highish value for the constant inflation.
