An Engine, Not a Camera: How Financial Models Shape Markets (Inside Technology)
| Author | : | |
| Rating | : | 4.20 (651 Votes) |
| Asin | : | 0262134608 |
| Format Type | : | paperback |
| Number of Pages | : | 392 Pages |
| Publish Date | : | 2016-09-30 |
| Language | : | English |
DESCRIPTION:
Portions of An Engine, Not a Camera won the Viviana A. Donald MacKenzie is Professor of Sociology (Personal Chair) at the University of Edinburgh. His books include Inventing Accuracy (1990), Knowing Machines (1996), and Mechanizing Proof (2001), all published by the MIT Press. Zelizer Prize in economic sociology from the American Sociological Association.
A plausible case Dr. Lee D. Carlson Many financial analysts and financial journalists have pointed to quantitative trading and the subprime mortgage markets as being the major cause behind the extreme volatility in the financial markets in the summer of 2007. This book therefore seems fitting for this particular time in financial history, if only at a bare minimum to educate the reader about the use of mathematical modeling in financial analysis and financial engineering. As the subtitle of the book indicates, the . Which came first, the market or the model? MacKenzie has an interesting take on the development of financial models, technology and organized exchanges, focusing on the latter half of the 20th century. He sees the three components as interacting as markets evolve. For example, the index futures exchanges did not really take off until options pricing theory made it possible to create spreadsheets to assist traders in options pricing. The incorporation of computers greatly increased market efficiency.MacKenzie analyzes the . Dr. Terrence McGarty said Brilliant Work, Takes You Through the Steps Which Got Us Where We Are Now.. MacKenzie has written a wonderful and brilliant book on a very complex set of issues; the development of mathematical finance theory. He has managed to take some very complex ideas and place them in highly readable and understandable ways and in addition places you in the midst of the process and the people as it has evolved over the past fifty years.He starts with a discussion of the commodity exchanges. The point he makes is that the exchanges could exist only with the railroad
In An Engine, Not a Camera, Donald MacKenzie argues that the emergence of modern economic theories of finance affected financial markets in fundamental ways. For example, in 1970, there was almost no trading in financial derivatives such as "futures." By June of 2004, derivatives contracts totaling $273 trillion were outstanding worldwide. More than that, the emergence of an authoritative theory of financial markets altered those markets fundamentally. These new, Nobel Prize-winning theories, based on elegant mathematical models of markets, were not simply external analyses but intrinsic parts of economic processes.Paraphrasing Milton Friedman, MacKenzie says that economic models are an engine of inquiry rather than a camera to reproduce empirical facts. MacKenzie suggests that this growth could never have happened without the development of theories that gave derivatives legitimacy and explained their complexities.MacKenzie examines the role played by finance theory in the two most serious crises to hit the world's financial markets in recent years: the stock market crash of 1987 and the market turmoil that engulfed the hedge fund Long-Term Capital Management in 1998. He also loo
(Karin Knorr Cetina, University of Konstanz and The University of Chicago)A brilliant, extremely lucid account of the connections between financial economics and the development of futures, options, and derivatives markets between the 1950s and 2001. (Anthony Hopwood Times Higher Education Supplement)In one lifetime modern finance theory has revolutionized the arts of canny investing. (Steven Shapin, Franklin L. Samuelson, MIT, Nobel Laureate in Economic Sciences)Donald MacKenzie has long been one of the world's most brilliant social and historical analysts of science and technology. (Neil Fligstein American Journal of Sociology)An Engine, Not a Camera is a compelling, detailed, and elegantly written