Hi,
I certainly believe that the techniques developed in (statistical) physics
can help us to understand the micro-structure of markets, and that they can
be very useful for for all kind of econometric questions.
The area of finance that is the closest to my heart (well, I at least work
there for some years now) is the pricing of derivatives using techniques
that are based on the dynamic replication of contingent claims a la
Black-Scholes.
Please allow me to ask the somewhat provokative question if for this
particular area there are any techniques in physics that are really more
proficient than those used by the mathematicians today (mainly stochastic
calculus and the Feynman-Kac equation).
Hope to hear lots of YES coming from everywhere -
Have a nice day
s
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