Physics Envy May be Hazardous to Your Wealth

In this talk Andrew Lo addresses the problem of finding the right level of abstraction with which to think about economic phenomena. He compares economics to physics, with some surprising results.

In physics it takes 3 laws to explain 99% of the data. In finance it takes more than 99 laws to explain about 3%

Still curious? Read Lo’s full paper here: WARNING: Physics Envy May Be Hazardous To Your Wealth!

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