The Physics of Wall Street: a brief History of Predicting the Unpredictable

“. . . soon-to-be-disgraced Senator Bob Packwood . . .”: Packwood resigned from 
the Senate on September 7, 1995, under a cloud of alleged sexual misconduct.
186 “Hermann Weyl was offered the position of chair . . .”: for more on Weyl’s biog-
raphy and contributions to geometry, see Atiyah (2003) and Scholz (1994).
186
“One of these was a prominent young physicist . . .”: for more on einstein’s 
biography, see Isaacson (2007), Galison (2003), and Pais (1982).
187 “The basic idea underlying general relativity . . .”: for more on general relativ-
ity, see Misner et al. (1973) and Wald (1984). the best nontechnical introduction to the 
subject is Geroch (1981).

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Notes 
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247
191 “Weyl called his new theory a gauge theory”: for more on the history of gauge 
theory, including Weyl’s early contributions, see o’raifeartaigh (1997).
192 “. . . accelerated when Yang, in collaboration with Jim Simons . . .”: Simons and 
Yang describe their collaboration in Zimmerman (2009); see also the famous Wu-Yang 
dictionary (Wu and Yang 1975).
192
“This framework was called the Standard Model . . .”: for more on the Stan-
dard Model, see Hoddeson et al. (1997) for the history and cottingham and Greenwood 
(2007) for the physics.
193 “Afterward, she and Maskin met . . .”: the version of events described here is 
due to Weinstein and Malaney. I contacted Maskin to confirm the story, but he indicated 
that he did not remember the sequence of events clearly enough to comment.
194 “Jorgenson replied by throwing her out of his office”: Again, this is Weinstein 
and Malaney’s account. they recall that Jorgenson’s criticism of Malaney’s thesis project 
was that (he claimed) she had merely found a new way to derive something called the 
divisia index. divisia indices (or divisia monetary aggregates) provide an alternative 
method of measuring economic variables like inflation. though these methods were 
already well known (but not widely used) when Malaney presented her ideas to Jorgen-
son, Malaney and Weinstein’s novel approach to deriving the divisia index had already 
yielded significant new results. for more on the divisia index, see divisia (1925), Barnett 
and chauvet (2010), and Handa (2000). In particular, see Barnett (2012), which argues 
that U.S. monetary policy is plagued by significant problems stemming from the use of 
inappropriate statistical measures, and in particular from not using divisia indices more 
widely. In other words, there is a political question, closely related to the question that 
the Boskin commission was set to work on, concerning the divisia index.
194
“. . . a classic result in economics known as Coase’s theorem”: coase’s theorem is 
originally described in coase (1960). See also Krugman and Wells (2009).
197 “To solve the index number problem . . .”: this proposal is described in detail 
in Malaney’s thesis (Malaney 1996) and (in somewhat modified form) in Smolin (2009). 
See also Illinski (2001), which takes a rather different approach to applying gauge theory 
in economics, as well as didier Sornette’s criticism of Illinski’s book (Sornette 1998).
197
“One day, late in 2005, Lee Smolin . . .”: the story told in this section is based 
in part on an interview with Smolin.
198 “. . . Smolin had published an article in the magazine Physics today . . .”: the 
article was Smolin (2005).
198
“. . . a book Smolin was just finishing . . .”: this book was Smolin (2006).
199 “He gave a talk on the way gauge-theoretic ideas . . .”: this talk, and Weinstein’s 
talks at the conferences described in the text, are available through Perimeter’s online 
archive. See Weinstein (2006, 2008, 2009).
200