The crises that have been afflicting the financial systems of the developed countries recently adds fuel to the argument. Even-though, innovation in finance and the associated products took off in the last decade or so, innovation that is built on shaky foundations of finance would prove to be counterproductive in the long run. What do you guys think ?
Would the field of finance be the least understood field of all social sciences ?
Any innovation that is built on a shaky foundation would be counterproductive in the long run. In answer to your question about the field of finance being the least understood, I beg to differ. The reason is this, finance deals with absolutes, meaning numbers. I would think the "soft sciences" of sociology, psychology, and the like would be the least understood in the long run because of the variety of theorys. I have been told that those studies are a combination of art and science.
Reply:Is economics a social science? No. If one defines economics as study of nature, properties, composition, laws and classification of wealth, economics becomes a perfect material science. Unfortunately economics concentrated on application of wealth rather than knowing wealth.
Regarding finance, it is pure material science. One must have knowledge of mathematics to understand finance.
Reply:Both of the other answers are wrong I do believe. Finance is a mainly a hard material science as it mainly deals with numbers, but includes the wisdom of economics in looking at behaviour and choices. Economics btw is also a social science - it deals with people's choices, mainly wrt money.
The financial system can easily be messed up by people speculating with large amts of money and the new complicated derivatives on the amrket - look at the U.S. subprime crisis caused by the banks, the Asian currency crisis caused by foreign currency speculators, Black Monday.
Also, this Q should be in the Business and Finance section, not economics
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