Sunday, November 11, 2007

Why Financial Engineering Doesn't Work

Martin Hutchinson wrote a post with this title at, 5 November. He concludes, "Financial engineering's benefit to the global economy is questionable at best and the increases it has produced in the financial services sector's share of global output may have been mere sucessful rent seeking". I agree. Financial engineering only made money for the financial engineers and left behind problems for the rest of us to pay for. Unlike say, mechancial engineering, there are no fixed numbers in finance. There is no Planck's constant.

1 comment:

control valves said...

I believe construction of such projects requires knowledge of engineering and management principles and business procedures, economics, and human behavior.