An Engine, Not a Camera by Donald Mackenzie

An Engine, Not a Camera by Donald Mackenzie

In An Engine, Not a Camera, Donald MacKenzie argues that the emergence of modern economic theories of finance affected financial markets in fundamental ways. These new, Nobel Prize-winning theories, based on elegant mathematical models of markets, were not simply external analyses but intrinsic parts of economic processes.

Paraphrasing Milton Friedman, MacKenzie says that economic models are an engine of inquiry rather than a camera to reproduce empirical facts. More than that, the emergence of an authoritative theory of financial markets altered those markets fundamentally. For example, in 1970, there was almost no trading in financial derivatives such as futures. By June of 2004, derivatives contracts totaling $273 trillion were outstanding worldwide. MacKenzie suggests that this growth could never have happened without the development of theories that gave derivatives legitimacy and explained their complexities.

MacKenzie examines the role played by finance theory in the two most serious crises to hit the world's financial markets in recent years: the stock market crash of 1987 and the market turmoil that engulfed the hedge fund Long-Term Capital Management in 1998. He also looks at finance theory that is somewhat beyond the mainstream--chaos theorist Benoit Mandelbrot's model of wild randomness. MacKenzie's pioneering work in the social studies of finance will interest anyone who wants to understand how America's financial markets have grown into their current form.

SKU	Unavailable
ISBN 13	9780262134606
ISBN 10	0262134608
Title	An Engine, Not a Camera
Author	Donald Mackenzie
Series	Inside Technology
Condition	Unavailable
Binding Type	Hardback
Publisher	The Mit Press
Year published	2006-04-14
Number of pages	392
Prizes	Winner of BISA International Political Economy Group Book Prize 2007
Cover note	Book picture is for illustrative purposes only, actual binding, cover or edition may vary.
Note	Unavailable