Can Quantum Physics Find the Answer to the World Financial Crisis.
ORAL
Abstract
We assume the global wealth of nations within the G-Global to be an American call option described as a stochastic process. We let the American call option to grow and to eventually generate profits to the nations of the G-Global. We show profits taken to be a discontinuous process, because when an investment banker or a country makes more profits continuously, then their vision will be guided by greed. When banks try to maximize profits continuously and so they operate on the edge of bankruptcy. We also assume the global wealth to be an index defined in terms of the expected global wealth of nations and normalized by their GDPs. We impose the following conditions: a). The sum of the GDPs of all nations making the G-Global is one (1), the normalizing GDP should not have an influence on the global wealth. All nations should be treated on the same footing. b). the change of the global wealth of nations to be a supermartingale. We set the drift term of the expectation decreasing process to be equal to zero. We obtain an Ordinary Differential Equation describing the dynamic of global wealth
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Authors
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Lamine Dieng
Rutgers University and the City University of New York