|
on Investment |
| By: | Marcos Lacasa-Cazcarra |
| Abstract: | We study the employment effects of the 22% increase in the Spanish minimum wage in 2019, focusing on young workers. Using census-grade administrative tax data covering the universe of formal wage bills and employment (Models 190/390 linked to personal income tax records), we construct several measures of treatment intensity, including two structurally grounded bite indicators based on the incidence of young minimum-wage workers and the implied increase in the wage bill obtained via Exponential Tilting. Difference-in-differences estimates with two-way fixed effects, dynamic event-study specifications, and robust confidence intervals from the HonestDiD framework all point to the same conclusion: the reform did not generate net disemployment effects for young workers. Point estimates of the elasticity are small and often positive, and confidence internals comfortably include zero even with sizable deviations from parallel trends. A triple-difference design exploiting pre-existing tourism dependence further shows that the sharp employment collapse of 2020 is primarily explained by the COVID-19 shock operating through tourism-intensive sectors, rather than by the minimum-wage hike itself. Our results suggest that, in the macroeconomic and institutional environment prevailing in Spain in 2019, with the minimum wage rising to around 60% of the average wage in a recovering economy, the labour market absorbed a large discrete increase in the wage floor without destroying aggregate youth employment. More broadly, the paper highlights how the choice of treatment definition, the use of census-grade data, robust DiD inference, and explicit modelling of concurrent shocks can shape conclusions about the effects of minimum-wage policies. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.20809 |
| By: | Erik Ernesto Vazquez (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine); Chirag Patel (Grenoble Ecole de Management, 38000 Grenoble, France); Lorena Siliceo (Facultad de Economía y Negocios, Universidad Anáhuac México, Huixquilucan, Mexico.) |
| Abstract: | Personal images of individual influencers are the backbone of image-sharing social media platforms (SMPs). Extant research on using personal images to develop online followership has focused on the main figure or focal area in the images. In doing so, extant research is unable to capture the perceptions and relative value of the main figure which depends not only on the figure but also on the contextual background location. We address this important research gap by studying the context effects of the background location used in images of influencers on followership in image-sharing SMPs. We use theory from context effects and visual perception literature in psychology and consumer behavior to develop our theoretical arguments leading to the hypotheses. We argue that the background location in images of an influencer has a direct and indirect effect on development of followership. Specifically, we hypothesize that an outdoor background is likely to have a greater effect on developing followership compared to an indoor background. Furthermore, this relationship is serially mediated by perceived naturalness and perceived originality. We use secondary field data from Instagram posts to test the direct effect of background location. In addition, experimental data are used to test for both the direct and indirect mediated effect. We obtain support for our hypotheses. |
| Abstract: | Résumé Les images personnelles publiées par les influenceurs constituent le pilier des plateformes sociales axées sur le partage d'images (SMPs). Les recherches existantes sur l'utilisation de ces images pour développer une audience en ligne se sont principalement concentrées sur la figure centrale ou la zone focale des images. Ce faisant, elles ne prennent pas en compte la perception et la valeur relative de cette figure, qui dépendent non seulement de l'individu représenté, mais aussi du contexte visuel en arrière-plan. Cette étude comble cette lacune en examinant les effets contextuels de l'arrière-plan des images d'influenceurs sur le développement de leur audience sur les plateformes de partage d'images. En mobilisant la littérature en psychologie et en comportement du consommateur portant sur les effets de contexte et la perception visuelle, nous développons un cadre théorique appuyant nos hypothèses. Nous soutenons que le lieu représenté en arrière-plan des images d'un influenceur a un effet direct et indirect sur la croissance de son audience. Plus précisément, nous formulons l'hypothèse qu'un arrière-plan extérieur est plus favorable au développement de l'audience qu'un arrière-plan intérieur. De plus, cette relation est médiée en série par le naturel et l'originalité perçus. Nous testons l'effet direct du lieu d'arrière-plan à l'aide de données secondaires issues de publications sur Instagram. En complément, des données expérimentales sont mobilisées pour évaluer les effets directs et indirects médiés. Nos résultats confirment les hypothèses avancées. |
| Keywords: | suivi, réseaux sociaux, images personnelles, effets contextuels, arrière-plan d'image, arrière-plan d'image effets contextuels images personnelles réseaux sociaux suivi |
| Date: | 2025–11–20 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05489732 |
| By: | Antonio Di Paolo (Department of Econometrics, Statistics and Applied Economics, Universitat de Barcelona, Spain.) |
| Abstract: | This paper investigates whether acquiring proficiency in a local language improves neighbourhood quality in a bilingual region, focusing on Catalonia, Spain. The analysis uses rich microdata linked to census-tract measures of neighbourhood quality, including average local income, unemployment benefits per capita, and a composite socioeconomic status index. OLS results show that oral proficiency in Catalan among native Spanish speakers is associated with better residential outcomes. To address potential endogeneity of language skills, I exploit the implementation of a language-ineducation policy that introduced Catalan as a medium of instruction, promoting Catalan-Spanish bilingualism among native Spanish speakers. Specifically, I construct an instrument consisting in the interaction between years of language exposure during compulsory education and an indicator for native Spanish speakers, considering that the reform did not affect oral Catalan proficiency among native Catalan speakers and assuming cohort trends unrelated to the reform are homogeneous across language groups. IV/TSLS estimates reveal no causal effect of increased oral Catalan skills, induced by school language exposure among native Spanish speakers, on any measure of neighbourhood quality. Falsification exercises aimed at validating the main identification assumption, along with robustness checks addressing potential confounders and alternative mechanisms, support the identification strategy and reinforce the main findings. Overall, the results suggest that although the reform significantly raised oral Catalan proficiency among native Spanish speakers, this variation in language skills does not translate into changes in residential sorting or neighbourhood quality. |
| Keywords: | Local Language Skills, Bilingualism, Language-in-education Policy, Neighbourhood Quality. JEL classification: I28; Z13; R23. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ira:wpaper:202513 |
| By: | Fitzgerald, Jack; Adema, Joop; Fiala, Lenka; Kujansuu, Essi; Valenta, David |
| Abstract: | Recent literature shows that when regression models are estimated on variables transformed with 'log-like' functions such as the inverse hyperbolic sine or ln(Z+1) transformations, one can obtain (semi-)elasticity estimates of any magnitude by linearly re-scaling the input variable(s) before transformation. We systematically re-analyze the replication data of 46 papers whose main conclusions are defended by log-like specifications. Our replication findings motivate new theoretical and simulation results showing that in log-like specifications, unit scale can be used to overfit data, creating an uncontrolled multiple hypothesis testing problem that frequently yields spuriously significant results. In particular, 38% of the estimates we re-analyze sit in a 'sweet spot', where both upward and downward re-scalings of variables' units before transformation shrink test statistics. Consequently, published estimates in this literature are statistically significant over 40% more frequently than in the general economics literature. We find that modest changes to model specification yield different statistical significance conclusions for 14-37% of estimates defending papers' main claims. We also show that for 99.8% of estimates, variables transformed with log-like functions do not meet data requirements for log-like specifications from a methodological recommendation cited by all papers in our replication sample. We synthesize and harmonize methodological guidelines and advocate for more robust alternative specifications, including normalized estimands, Poisson regression, and quantile regression. |
| Keywords: | Inverse hyperbolic sine, Log-like transformations, Publication bias, Reproducibility, Selective reporting |
| JEL: | C10 C12 C18 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:i4rdps:284 |
| By: | Konietschke, Paul; Metzler, Julian; Ponte Marques, Aurea |
| Abstract: | Conventional credit risk models understate tail risk by centering on mean default probabilities and neglecting distributional and sectoral heterogeneity. We propose a Quantile Probability of Default (QPD) framework based on unconditional quantile regressions estimated on flow default rates from five million non-financial firms across nine countries, conditioned on macro- and sectoral scenario covariates standard in stress testing. The tail exhibits three- to five-fold stronger sensitivity than at the median, revealing non-linearities and asymmetric sectoral propagation of credit risk. We validate the performance of our model across crisis periods and benchmark models to confirm the framework’s robustness and prudential efficiency. Under the European Central Banks’s 2025 increasing geopolitical and trade tensions scenario, the QPD identifies higher tail vulnerabilities in construction, trade, hospitality, and real estate. The framework embeds distributional estimation into stress testing, advancing scenario-based assessment of sectoral credit risk for policy and prudential applications. JEL Classification: C21, C54, D22, G21, G32 |
| Keywords: | firm dynamics, non-linearity, probability of default, stress testing, trade tension |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263207 |
| By: | Michael Amior; Shmuel San |
| Abstract: | Firms face significant constraints in their ability to differentiate pay by worker productivity. We show how these internal equity constraints generate a quantity-quality trade-off in hiring: firms which offer higher wages attract higher skilled workers, but cannot profitably employ lower skilled workers. In equilibrium, this results in workplace segregation and pay dispersion even among ex-ante identical firms. Our framework provides a novel interpretation of the (empirically successful) log additive AKM wage model, and shows how log additivity can be reconciled with sorting of high-skilled workers to high-paying firms. It can also rationalize a hump-shaped relationship between firm size and firm pay, and provides new insights into aggregate-level, regional and sectoral variation in earnings inequality - which we explore using Israeli administrative data. |
| Keywords: | wages, productivity, labour, labor, skills |
| Date: | 2026–03–16 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2161 |
| By: | Bahar Ta\c{s}kesen |
| Abstract: | Generative AI has transformed the economics of information production, making explanations, proofs, examples, and analyses available at very low cost. Yet the value of information still depends on whether downstream users can absorb and act on it. A signal conveys meaning only to a learner with the structural capacity to decode it: an explanation that clarifies a concept for one user may be indistinguishable from noise to another who lacks the relevant prerequisites. This paper develops a mathematical model of that learner-side bottleneck. We model the learner as a mind, an abstract learning system characterized by a prerequisite structure over concepts. A mind may represent a human learner, an artificial learner such as a neural network, or any agent whose ability to interpret signals depends on previously acquired concepts. Teaching is modeled as sequential communication with a latent target. Because instructional signals are usable only when the learner has acquired the prerequisites needed to parse them, the effective communication channel depends on the learner's current state of knowledge and becomes more informative as learning progresses. The model yields two limits on the speed of learning and adoption: a structural limit determined by prerequisite reachability and an epistemic limit determined by uncertainty about the target. The framework implies threshold effects in training and capability acquisition. When the teaching horizon lies below the prerequisite depth of the target, additional instruction cannot produce successful completion of teaching; once that depth is reached, completion becomes feasible. Across heterogeneous learners, a common broadcast curriculum can be slower than personalized instruction by a factor linear in the number of learner types. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.19349 |
| By: | Allen Yikuan Huang; Zheqi Fan |
| Abstract: | This paper develops an autonomous framework for systematic factor investing via agentic AI. Rather than relying on sequential manual prompts, our approach operationalizes the model as a self-directed engine that endogenously formulates interpretable trading signals. To mitigate data snooping biases, this closed-loop system imposes strict empirical discipline through out-of-sample validation and economic rationale requirements. Applying this methodology to the U.S. equity market, we document that long-short portfolios formed on the simple linear combination of signals deliver an annualized Sharpe ratio of 3.11 and a return of 59.53%. Finally, our empirics demonstrate that self-evolving AI offers a scalable and interpretable paradigm. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.14288 |
| By: | Nita Handastya |
| Abstract: | Childhood socioeconomic disadvantage is a well established determinant of health in later life. Less is known about how early-life deprivation unfolds when individuals experience major institutional transformation and migration in adulthood. Cohorts socialized under Soviet institutions provide a useful setting to examine life-course divergence under systemic change. This study uses harmonized data from the Survey of Health, Ageing and Retirement in Europe (SHARE) on older adults residing in Estonia, Latvia, and Israel to examine the association between retrospectively reported childhood deprivation and multiple health outcomes in later life, including poor self-rated health, chronic disease burden, functional limitation, depression, and a composite multifrailty indicator. Logistic regression models and predicted probabilities assess whether childhood deprivation predicts late-life health across different adult institutional contexts and whether associations vary by linguistic affiliation. Higher levels of childhood deprivation are consistently associated with poorer health outcomes across all three countries. Individuals in the highest deprivation quintile show substantially higher odds of adverse health outcomes, including multifrailty. Stratified analyses for Estonia and Latvia indicate broadly similar deprivation-health gradients among national-language and Russian-speaking populations. These findings highlight the persistence of childhood disadvantage and the importance of early-life conditions in shaping health inequalities in ageing populations exposed to systemic transformation. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.14118 |
| By: | Anders G. Froeseth |
| Abstract: | Froeseth (2026) shows that a proportional wealth tax on market values is neutral with respect to portfolio choice, Sharpe ratios, and equilibrium prices under CRRA preferences and geometric Brownian motion. This paper investigates the robustness of that result along two dimensions. First, we extend the neutrality frontier: portfolio neutrality, including all intertemporal hedging demands, is preserved under stochastic volatility (Heston and general Markov diffusions) and Epstein-Zin recursive utility, but breaks under non-homothetic preferences such as HARA. Second, we identify four channels through which implemented wealth taxes depart from neutrality even under CRRA: non-uniform assessment across asset classes, general equilibrium price effects in inelastic markets, progressive threshold structures, and endogenous labour supply. Each channel is formalised and, where possible, calibrated to the Norwegian wealth tax system. The progressive threshold introduces a tax shield that increases risk-taking near the exemption boundary, an effect opposite in sign to the HARA distortion, and, at the extreme, generates a participation margin at which investors exit the tax jurisdiction entirely. We formalise this tax-induced migration as the extreme response at the progressive threshold and examine the Norwegian post-2022 experience as a case study. The full framework is applied to evaluate the Saez-Zucman proposal for a global minimum wealth tax on billionaires and the related French proposal for a national minimum tax above EUR 100 million. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.05277 |
| By: | Temel, Tugrul |
| Abstract: | Modern economies are networks of interdependent sectors, yet conventional tools for industrial policy overlook the critical pathways, bottlenecks, and communities that de- termine how shocks propagate and productivity gains diffuse. This paper develops a replicable computational methodology—three graph-theoretic algorithms—to transform dense input-output tables into actionable policy diagnostics. The framework identifies critical upstream and downstream pathways, constructs cascading layers of distortion propagation, and quantifies network resilience through community detection and edge- betweenness centrality. Applying this toolkit to Turkey’s 2018 manufacturing sector reveals three principal findings: finance operates as a critical bottleneck where reg- ulated upstream inputs converge; the network exhibits only moderate resilience, with six between-community edges carrying disproportionate systemic risk; and two reinforc- ing cycles—{manufacturing → agriculture → construction → manufacturing} and {manufacturing → energy → construction → manufacturing}—amplify distortions. These results generate specific policy recommendations: prioritize financial sector reforms, coordinate regulation across energy-transport-finance pathways, and protect vulnerable between-community edges. The methodology enables evidence-based, network-aware indus- trial policy applicable to any input-output dataset. |
| Keywords: | production networks; cascading effects; network risk; graph-theoretic analysis; Turkiye; |
| JEL: | C63 C67 D57 L16 L52 |
| Date: | 2026–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128113 |
| By: | Chung-Hoo Poon; James Kwok; Calvin Chow; Jang-Hyeon Choi |
| Abstract: | Anti-money laundering (AML) systems are important for protecting the global economy. However, conventional rule-based methods rely on domain knowledge, leading to suboptimal accuracy and a lack of scalability. Graph neural networks (GNNs) for digraphs (directed graphs) can be applied to transaction graphs and capture suspicious transactions or accounts. However, most spectral GNNs do not naturally support multi-dimensional edge features, lack interpretability due to edge modifications, and have limited scalability owing to their spectral nature. Conversely, most spatial methods may not capture the money flow well. Therefore, in this work, we propose LineMVGNN (Line-Graph-Assisted Multi-View Graph Neural Network), a novel spatial method that considers payment and receipt transactions. Specifically, the LineMVGNN model extends a lightweight MVGNN module, which performs two-way message passing between nodes in a transaction graph. Additionally, LineMVGNN incorporates a line graph view of the original transaction graph to enhance the propagation of transaction information. We conduct experiments on two real-world account-based transaction datasets: the Ethereum phishing transaction network dataset and a financial payment transaction dataset from one of our industry partners. The results show that our proposed method outperforms state-of-the-art methods, reflecting the effectiveness of money laundering detection with line-graph-assisted multi-view graph learning. We also discuss scalability, adversarial robustness, and regulatory considerations of our proposed method. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.23584 |
| By: | Giovanni Guidetti; Riccardo Leoncini; Mariele Macaluso |
| Abstract: | This paper studies patenting trends in artificial intelligence (AI) and robotics from 1980 to 2019. We introduce a novel distinction between traditional robotics and robotics embedding AI functionalities. Using patent data and a time-series econometric approach, we examine whether these domains share common long-run dynamics and how their trajectories differ across major innovation systems. Three main findings emerge. First, patenting activity in core AI, traditional robots, and AI-enhanced robots follows distinct trajectories, with AI-enhanced robotics accelerating sharply from the early 2010s. Second, structural breaks occur predominantly after 2010, indicating an acceleration in the technological dynamics associated with AI diffusion. Third, long-run relationships between AI and robotics vary systematically across countries: China exhibits strong integration between core AI and AI-enhanced robots, alongside a substantial contribution from universities and the public sector, whereas the United States displays a more market-oriented patenting structure and weaker integration between AI and robots. Europe, Japan, and South Korea show intermediate patterns. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.05034 |
| By: | Khaled Saadaoui (Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School); Patrice Rivas (EDF [E.D.F.] - EDF – Électricité de France) |
| Abstract: | This article examines how major French companies integrate digital vulnerability into their corporate social responsibility (CSR) strategies. Based on a qualitative study conducted with five organizations (SFR, Bouygues, La Poste, EDF, SNCF), it analyzes the perceptions, mechanisms, and limitations of their engagement in this domain. The findings reveal often fragmented approaches, largely outsourced to nonprofit partners. Building on the frameworks of Selwyn (2004), Van Dijk (2005), and Gond et al. (2009), the article highlights the tensions between image management, authenticity, and transformative impact. From a managerial perspective, it advocates for a more integrated governance of digital inclusion and the strategic evaluation of einclusion within CSR policies. |
| Abstract: | Cet article interroge la manière dont les grandes entreprises françaises intègrent la précarité numérique dans leur stratégie RSE. À partir d'une enquête qualitative menée auprès de cinq groupes (SFR, Bouygues, La Poste, EDF, SNCF), il analyse les perceptions, dispositifs et limites de ces engagements. Les résultats mettent en évidence des démarches souvent fragmentées et en grande partie confiées à des partenaires associatifs. S'inspirant de Selwyn (2004), Van Dijk (2005) et Gond et al. (2009), l'article met en lumière les tensions entre image, sincérité et transformation. Sur le plan managérial, il plaide pour une gouvernance plus intégrée de l'inclusion numérique et pour l'évaluation stratégique de l'e-inclusion au sein des politiques RSE. |
| Keywords: | Digital Inclusion, Collaborative Governance, Digital Illiteracy, Corporate Social Responsibility (CSR), Digital Divide, Précarité numérique, Responsabilité sociale de l’entreprise (RSE), Illectronisme, Inclusion numérique, Gouvernance partenariale |
| Date: | 2026–01–27 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05543767 |
| By: | Maria Cecilia Bustamante; Bruno Pellegrino |
| Abstract: | We present a new dynamic model of corporate investment in imperfectly-competitive product markets, extending the neoclassical (Q) theory of capital to a multi-firm, multi-product, fully-structural model. Our model embeds a state-of-the-art hedonic demand system, endogenizes firms' markups and generalizes Tobin's Q to a matrix (or network) of product market spillovers, which captures how each firm's investment affects that of its rivals. We provide existence and uniqueness results along with exact, global analytical solutions for the Markov Perfect Equilibrium investment policies. We then take our model to the data for the universe of U.S. public companies and obtain five novel insights: 1) product market competition is a key force driving aggregate investment and capital allocation; 2) the persistence of firm's capital stocks increased over the past 25 years (i.e. capital became “stickier”); 3) monopoly rents account for a large, rising share of firms' value; 4) positive shocks to firms' cost of capital increase markups and concentration; 5) mergers consummated since 1995 have led to a modest decline in aggregate capital formation; at the firm-level the resulting increases in markups are highly heterogeneous. |
| Keywords: | networks, investment, product market |
| JEL: | C7 D2 E2 G3 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12548 |
| By: | Alfred Michel Nandnaba (UCA - Université Clermont Auvergne) |
| Abstract: | While armed conflict remains a major impediment to economic and political stability in developing countries, the potential role of digital financial inclusion, particularly mobile money, in mitigating violent conflict remains largely unexplored. This article examines the impact of mobile money adoption on armed conflict across 103 developing countries from 2000 to 2020, using the Entropy Balancing method to address selection bias. The findings show that mobile money significantly reduces violent conflicts, with an average decrease of 282 conflict-related deaths. These results remain robust across various sensitivity checks, including alternative model specifications, instrumental variable techniques to account for the reverse causality, and analyses of dynamic and spillover effects. The study also highlights important heterogeneity in the impact depending on the type of mobile money service, the country's level of development, the duration of the conflict, financial sector development, and geographic region. Moreover, it identifies key economic channels, including income, unemployment, inequality, and consumption volatility, through which mobile money contributes to the reduction of violent conflict. These findings underscore the strategic importance of digital financial services for promoting peace and fostering economic development in low- and middle- income countries. |
| Keywords: | Developing countries, Entropy Balancing, Mobile Money, Violent conflicts |
| Date: | 2026–03–05 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04566893 |
| By: | Anders G Fr{\o}seth |
| Abstract: | A proportional wealth tax -- a levy on the stock of wealth -- preserves portfolio neutrality by acting as a uniform drift shift in the Fokker-Planck equation for wealth dynamics. We extend this result to the full system of ownership taxes (eierkostnader) that a shareholder faces: a corporate tax on gross profits, a capital income tax on the risk-free return, a dividend and capital gains tax on the excess return, and a wealth tax on net assets. Each tax modifies the drift of the wealth process in a distinct way -- multiplicative rescaling, constant shift, or regime-dependent compression -- while leaving the diffusion coefficient unchanged. We show that the combined system preserves portfolio neutrality under three conditions: (i) the capital income tax rate equals the corporate tax rate, (ii) the shielding rate equals the risk-free rate, and (iii) the wealth tax assessment is uniform across assets. When these conditions hold, the after-tax excess return is a uniform rescaling of the pre-tax excess return by the factor (1-tau_c)(1-tau_d), and the drift-shift symmetry of the wealth-tax-only case generalises to a drift-shift-and-rescale symmetry. We classify the distortions that arise when each condition fails and show that flow-tax distortions and stock-tax distortions are additively separable: they do not interact. The shielding deduction -- a feature of several real-world tax systems, including the Norwegian aksjonaermodellen -- emerges as the mechanism that restores the symmetry between equity and debt taxation within this framework. Calibrated to the Norwegian dual income tax, conditions (i) and (ii) hold by institutional design; the only binding distortion is non-uniform wealth tax assessment, which generates portfolio tilts roughly 300 times larger than any residual flow-tax channel. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.15974 |
| By: | Bernhard K Meister |
| Abstract: | In quantum mechanics and finance, numeraire invariance - the unobservability of absolute phase or price scale - fits with a projective and curved state space. This projective geometry has a measurable signature. For spin-one and higher spin systems, the Taylor expansion of directed distance contains a non-zero cubic term, which induces a fundamental asymmetry under the exchange of states. The Second Law, the failure of Maxwell's demon, and the limitations of sequential traders can all be reduced to this asymmetry. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.09966 |