by Numerous economics journals have not published Ole Peters work because they said they didn't think it would be interesting to their readers. The proposition is about as outlandish as it sounds: Everything we know about modern economics is wrong.And the man who says he can prove it doesn’t have a degree in economics.But Ole Peters is no ordinary crank. A physicist by training, his theory draws on research done in close collaboration with the late Nobel laureate Murray Gell-Mann, father of the quark. He’s also won over two noted thinkers in the world of finance — Nassim Nicholas Taleb and Michael Mauboussin — not to mention a groundswell of enthusiastic supporters in the Twittersphere.His beef is that all too often, economic models assume something called “ergodicity.” That is, the average
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Numerous economics journals have not published Ole Peters work because they said they didn't think it would be interesting to their readers.
The proposition is about as outlandish as it sounds: Everything we know about modern economics is wrong.
And the man who says he can prove it doesn’t have a degree in economics.
But Ole Peters is no ordinary crank. A physicist by training, his theory draws on research done in close collaboration with the late Nobel laureate Murray Gell-Mann, father of the quark. He’s also won over two noted thinkers in the world of finance — Nassim Nicholas Taleb and Michael Mauboussin — not to mention a groundswell of enthusiastic supporters in the Twittersphere.
His beef is that all too often, economic models assume something called “ergodicity.” That is, the average of all possible outcomes of a given situation informs how any one person might experience it. But that’s often not the case, which Peters says renders much of the field’s predictions irrelevant in real life. In those instances, his solution is to borrow math commonly used in thermodynamics to model outcomes using the correct average.
Bloomberg
Everything We’ve Learned About Modern Economic Theory Is Wrong