Mathematical Development outside the Finance Sector
Despite Bachelier, the development and progress of mathematics (which was considerable during the 20th Century) remained relatively disjoint from finance until a major connection was made in the 1970s. Economics as a discipline had certainly made increasing use of mathematics, as much at the model level as in the treatment of data with a view to economic forecasting. But current finance — stock exchange and actuarial techniques — involved little more than a set of log tables. As recurs throughout the history of science, the concepts useful for the management of what we call new financial products, or derivatives, provided by mathematics, had been developed for the study of completely different phenomenon: thermal currents, Brownian motion, spectral analysis of signals, noise filtration, etc. More precisely, the mathematical concepts which changed finance, and that are now used daily in Chicago, Paris, London or Singapore, and which will be described in a later chapter, were developed with in Pure Mathematics, that is to say from investigations within mathematics itself.
KeywordsBrownian Motion Financial Market Mathematical Development Swiss Franc Economic Forecast
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