Related papers: Economics need a scientific revolution
The dynamic network of relationships among corporations underlies cascading economic failures including the current economic crisis, and can be inferred from correlations in market value fluctuations. We analyze the time dependence of the…
A confluence of advances in the computer and mathematical sciences has unleashed unprecedented capabilities for enabling true evidence-based decision making. These capabilities are making possible the large-scale capture of data and the…
Statistics experiences a storm around the perceived misuse and possible abuse of its methods in the context of the so-called reproducibility crisis. The methods and styles of quantification practiced in mathematical modelling rarely make it…
This paper fundamentally reformulates economic and financial theory to include electronic currencies. The valuation of the electronic currencies will be based on macroeconomic theory and the fundamental equation of monetary policy, not the…
Although classical economic theory is based on the concept of stable equilibrium, real economic systems appear to be always out of equilibrium. Indeed, they share many of the dynamical features of other complex systems, e.g., ecological…
The conventional economic approaches explore very little about the dynamics of the economic systems. Since such systems consist of a large number of agents interacting nonlinearly they exhibit the properties of a complex system. Therefore…
In the area of credit risk analytics, current Bankruptcy Prediction Models (BPMs) struggle with (a) the availability of comprehensive and real-world data sets and (b) the presence of extreme class imbalance in the data (i.e., very few…
A four-pronged approach to dealing with Social Science Phenomenon is outlined. This methodology is applied to Financial Services, Economic Growth and Well-Being. The four prongs are like the four directions for an army general looking for…
Making sense of theory choice in normal and across extraordinary science is central to philosophy of science. The emergence of machine learning models has the potential to act as a wrench in the gears of current debates. In this paper, I…
The document provides an overview of financial climate risks. It delves into how climate change impacts the global financial system, distinguishing between physical risks (such as extreme weather events) and transition risks (stemming from…
There are two main opposing schools of statistical reasoning, Frequentist and Bayesian approaches. Until recent days, the frequentist or classical approach has dominated the scientific research, but Bayesianism has reappeared with a strong…
The complexity of cultures in the modern world is now beyond human comprehension. Cognitive sciences cast doubts on the traditional explanations based on mental models. The core subjects in humanities may lose their importance. Humanities…
Financial crises are known as crashes that result in a sudden loss of value of financial assets in large part and they continue to occur from time to time surprisingly. In order to discover features of the financial network, the pairwise…
The second industrial revolution saw the development of management methods tailored to the challenges of the times: firstly, the need for mass production, and then, the pursuit of improved quality and customer satisfaction, followed by a…
A major gap exists between the conceptual suggestion of how much a nation should invest in science, innovation, and technology, and the practical implementation of what is done. We identify 4 critical challenges that must be address in…
In statistical analysis, many classic results require the assumption that models have finite mean or variance, including the most standard versions of the laws of large numbers and the central limit theorems. Such an assumption may not be…
Prediction problems in finance go beyond estimating the unknown parameters of a model (e.g. of expected returns). This is because such a model would have to include parameters governing the market participants' propensity to change their…
The new business paradigms originate a strong necessity to re-think the theory of the firm with the aim to get a better understanding on the organizational and functional principles of the firm, operating in the investment economies in the…
Modern physics has demonstrated that matter behaves very differently as it approaches the speed of light. This paper explores the implications of modern physics to the operation and regulation of financial markets. Information cannot move…
The use of science for policy is at the core of a perfect storm generated by the insurgence of several concurrent crises: of science, of trust, of sustainability. The modern positivistic model of science for policy, known as evidence based…