More on “mathiness” in economics

Paul Romer has a new post about “mathiness”, this time in financial economics. Right at the top of the post, he includes two links to blog posts by Tim Johnson about how mathiness was used to obfuscate what the math says in finance, so that official investigations into the latest financial crisis, the one that started in earnest in 2007, would miss something. In Romer’s words, “People in finance used math to hide what they were doing.” The Johnson posts are rich in material from the beginnings of probability theory, incidentally, and surprised me with a connection to Aristotle and how thinking about money as a universal measure showed people the way to apply math to physics; Johnson also connects finance to a notion of justice. Fascinating stuff! I hope to carve some time out to delve in this more deeply.

H/T for the Paul Romer link: Mark Thoma, here.

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