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  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
An Engine, Not a Camera: How Financial Models Shape Markets

An Engine, Not a Camera: How Financial Models Shape Markets

MacKenzie, Donald

Paperback

Series: Inside Technology

Investing & FinanceTechnology & Engineering

ISBN10: 0262633671
ISBN13: 9780262633673
Publisher: MIT Press
Published: Sep 1 2008
Pages: 392
Weight: 1.15
Height: 0.90 Width: 5.90 Depth: 8.80
Language: English
In An Engine, Not a Camera, Donald MacKenzie argues that the emergence of modern economic theories of finance affected financial markets in fundamental ways. 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. More than that, the emergence of an authoritative theory of financial markets altered those markets fundamentally. 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. MacKenzie suggests that this growth could never have happened without the development of theories that gave derivatives legitimacy and explained their complexities.

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