Time for a Change: Introducing irreversible time in economics - Dr Ole Peters

An exploration of the remarkable consequences of using Boltzmann's 1870s probability theory and cutting-edge 20th Century mathematics in economic settings. An understanding of risk, market stability and economic inequality emerges.
The lecture presents two problems from economics: the leverage problem "by how much should an investment be leveraged", and the St Petersburg paradox. Neither can be solved with the concepts of randomness prevalent in economics today. However, owing to 20th-century developments in mathematics these problems have complete formal solutions that agree with our intuition. The theme of risk will feature prominently, presented as a consequence of irreversible time.
A lecture by Dr Ole Peters
The transcript and downloadable versions of the lecture are available from the Gresham College website:
www.gresham.ac....
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