The two quantifications of the financial theory. A contribution to the critical history of financial modelling

Working paper de Christian Walter

I describe the changes of the financial theory over the long run by using the sociological notion of quantification and by coining a new terminology and framework: the first and second quantifications of this theory. I present an overview of the two quantifications by mirroring them with a stylized elementary market moving towards equilibrium. Then I illustrate the shift resulting from this transformation by describing the way the two quantifications impacted a well-known technique of the traditional finance, the calculation of the present value by discounting future cash flows.


Christian Walter is chartered actuary of the French Institute of Actuaries (IA). After being graduate of ESSEC (1983), he obtained his doctorate in Economics (1994) and his Habilitation à diriger des recherches (HDR) in Management Science (2004). He has been a visiting scholar at Yale University. He has taught at the University of Evry (mathematics department) and Sciences Po Paris for several years, before joining the University of Paris 1 Panthéon-Sorbonne. He also taught at the University of Columbia (New York) as visiting professor. He is a frequent lecturer and the author of several publications in actuarial mathematics, finance, and history of financial thought.


Christian Walter. Les deux quanti cations de la theorie nanciere. Contribution a une histoire critique des modeles nanciers. FMSH-WP-2015-89. 2015.

Published at 19 February 2015