Lessons Learned from the Misuse of Mathematical Models: the 2008 Financial Crisis

摘要

In this paper, we report the immediate causes of the 2008 financial crisis, in the shape of products of financial engineering associated with human greed and stupidity, and necessarily aided and abetted by theBlack-Scholes-Merton model, and the mediate, and deeper, causesderived from development promoted by the scientific and technological binomial. We finally draw realistic conclusions regarding the inexorable effects that logically derive from the above causes. An important finding is that human beingsare the only animals to make the same mistake twice. The necessaryconditions are again being generated and will soon be sufficient for acrash.like the one thatcaused the 2007-08 financial crisis, to recur.