Finance’s market focus resulted from mathematical tractability and microeconomic training
Evidence
The shift of attention from corporation to market was in part a matter of finding a focus that was tractable mathematically. It was also a shift encouraged by the application to finance of orthodox microeconomic ways of thinking: recall Sharpe’s testimony, quoted in chapter 2, that he “asked the question microeconomists are trained to ask. If everyone [that is, all investors] were to behave optimally … what prices will securities command once the capital market has reached equilibrium.” The shift was most likely also helped for example, in the attractiveness to students of the research topics involved by the gradual recovery in prestige of the stock market in the United States from a nadir that lasted from 1929 to the 1940s. — Donald MacKenzie, An Engine, Not a Camera, 329
Categorization
- XREF: connects to: Finance progressed where it studied markets rather than firms’ internal workings — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 327
Broader Connections
- Finance progressed where it studied markets rather than firms’ internal workings
#expands(0.75) — Donald MacKenzie, An Engine, Not a Camera, 327