Circuit Theory of Finance

By James Kim 

One day while sitting down and thinking, I noticed how so many of the engineers these days are going in the financial sector. I would surmise that is was because of the mathematical confidence engineers have over business students right from the starting gate. It occurred to me that circuits and financial modeling was a natural relationship. In my excitement of discovering something genuinely new, I've discovered that is was already thought of before. From what I can understand from the papers I've read, the approach came from a macroeconomic financial discipline rather than the microeconomic engineering perspective. The key factor in the relationship between circuit theory and financial analysis is that circuit theory provides a means for effective analysis. Though this seems to be an obvious relationship, I wasn't able to find much except a starting point with Bossone's white paper of circuit theory of finance. Here I will write my thoughts and findings.