MAKING MONEY FROM MATHEMATICAL-MODELS

This paper is a discussion of the scientific significance and nature o f mathematical models generally, and in finance theory in particular; of the relation of such models to a postulated 'reality'; of the suffi ciency of the empirical grounding of such models to the task of drawin g useful inferences about such a reality; and of the danger of unwitti ngly propagating erroneous conclusions about this reality in the absen ce of such a grounding. Some suggestion as to how the current empirica l grounding of mathematical modelling in finance can be enriched.