in which economics have not had more of an impact. 50 years ago modern statistical finance was created through the work of academic economists like miller, sharp and others. it s hard to imagine until the academic work of control 40 years ago no one on wall street have the ability to properly price stock-option and many of the other derivatives that have been the center of the financial crisis. moreover as fed and treasury officials intervened in the markets following the crisis meeting the terms of the t.a.r.p. for bayh pricing model stopped in the finance classis. hand-in-hand with the rise of financial economics has been the rise of finance itself. in 1947 to finance industry accounted for only 2.7% of u.s. gdp. today it has more than triple the size to 7.7%. in 1990, the was 610 hedge funds with $30 billion under management. by 2007, there were more than 7,000 on this with approximately $1.9 trillion under management. while world gdp in 2006 stood at approximately $47 tri