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Quantum Field Theory for Economics and Finance

By (author) Belal Ehsan Baaquie
Format: Hardback
Publisher: Cambridge University Press, Cambridge, United Kingdom
Published: 23rd Aug 2018
Dimensions: w 175mm h 252mm d 48mm
Weight: 1365g
ISBN-10: 1108423159
ISBN-13: 9781108423151
Barcode No: 9781108423151
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Synopsis
An introduction to how the mathematical tools from quantum field theory can be applied to economics and finance, providing a wide range of quantum mathematical techniques for designing financial instruments. The ideas of Lagrangians, Hamiltonians, state spaces, operators and Feynman path integrals are demonstrated to be the mathematical underpinning of quantum field theory, and which are employed to formulate a comprehensive mathematical theory of asset pricing as well as of interest rates, which are validated by empirical evidence. Numerical algorithms and simulations are applied to the study of asset pricing models as well as of nonlinear interest rates. A range of economic and financial topics are shown to have quantum mechanical formulations, including options, coupon bonds, nonlinear interest rates, risky bonds and the microeconomic action functional. This is an invaluable resource for experts in quantitative finance and in mathematics who have no specialist knowledge of quantum field theory.

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'This book could be just the volume for someone wanting to make the transition from calculating matrix elements to designing financial instruments, from spinors to swaps or from operators to options ... The book's structure interleaves traditional lessons in quantum field theory with topics in econophysics, producing a rather novel result.' Stephen J. Blundell, Contemporary Physics