A quantum walk down Wall Street
source link: https://www.economist.com/finance-and-economics/2021/11/06/a-quantum-walk-down-wall-street
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ButtonwoodA quantum walk down Wall Street
Lessons for finance from 20th-century physics
FINANCE AND physics have long been productive bedfellows. When he wasn’t writing the laws of mechanics and gravity, Isaac Newton ran the Royal Mint, making coins harder to forge and forcing counterfeiters to the gallows. The quantitative tools developed in 1900 by Louis Bachelier to study the French stockmarket were taken up by Albert Einstein to prove the existence of atoms. Norbert Wiener formalised them into a mathematical framework that remains at the heart of today’s financial models.
Yet finance has been slower to absorb other big ideas from 20th-century physics. That is perhaps unsurprising, because they are generally bizarre. Fire a beam of electrons through two slits onto a screen and they will pass through both at once, travelling as a wave but arriving as particles. Concentrate enough energy in a region of space, and matter and antimatter pop out of the void. Introduce the right two particles to each other and they pop back into it.
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