PublishedScribe Publications, April 2013 |
ISBN9781921640452 |
FormatSoftcover, 304 pages |
Dimensions21cm × 13.6cm × 2.2cm |
After the economic meltdown of 2008, Warren Buffett famously warned, 'Beware of geeks bearing formulas.' But as James Weatherall demonstrates, not all geeks are created equal. Taking us from fin-de-siecle Paris to Rat Pack-era Las Vegas, from wartime government labs to Yippie communes on the Pacific coast, Weatherall shows how a special breed of physicists successfully brought their science to bear on some of the thorniest problems in economics.
While the crisis was partly a failure of mathematical modelling, it was even more, a failure of some financial institutions to think like physicists. Models - whether in science or finance - have limitations; they break down under certain conditions. And in 2008, sophisticated models fell into the hands of people who didn't understand their purpose, and didn't care. It was a catastrophic misuse of science. The solution, however, is not to give up on models; it's to make them better. Weatherall reveals the people and ideas on the cusp of a new era in finance. We see a geophysicist predict a massive stock-market crash by using a model designed for earthquakes. We learn about a physicist-run hedge fund that earned 2478.6 per cent over the course of the 1990s.
And we discover how an obscure idea from quantum theory might soon be used to create a far more accurate consumer price index. Both persuasive and accessible, The Physics of Wall Street will change how we think about our economic future.
