Lessons for finance from 20th-century physics
FINANCE AND physics have long been productive bedfellows. When he wasn’t writing the laws of mechanics and gravity, Isaac Newton ran the Royal Mint, making coins harder to forge and forcing counterfeiters to the gallows. The quantitative tools developed in 1900 by Louis Bachelier to study the French stockmarket were taken up by Albert Einstein to prove the existence of atoms. Norbert Wiener formalised them into a mathematical framework that remains at the heart of today’s financial models.
This article appeared in the Finance & economics section of the print edition under the headline “Schrödinger’s markets”
From the November 6th 2021 edition
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