Paper: arXiv 2311.01542

Authors: Fabio Bagarello, Biagio Bossone

Abstract

According to the Accounting View of Money (AVM), the money issued by commercial banks in the form of demand deposits features a hybrid nature, since deposits can be shown to consist of a share of deposits bearing the characteristics of debt (debt-deposits) and a share of deposits bearing the characteristics of equity (equity-deposits), in a mix that depends on factors that relate to the issuing banks and the environment where they operate and interact, which may change over time. Following this important finding of the AVM, it is only consequential to associate the hybrid nature of bank deposits with the dual nature of the objects which is typical in quantum physics, and to investigate whether and how the application of quantum analytical methods and ideas to a form of money showing dualistic features could be used to extract valuable economic information.

Complexity vs Empirical Score

  • Math Complexity: 3.5/10
  • Empirical Rigor: 2.0/10
  • Quadrant: Philosophers — conceptual discussion, limited math and data

Why this score: The paper relies heavily on conceptual analogies between quantum physics and monetary accounting without providing rigorous mathematical formalization or empirical backtesting. While the proposal of a hybrid debt-equity deposit model derived from the Accounting View of Money is novel, the execution lacks empirical validation and reproducible data methods.

Research Flowchart

  flowchart TD
    A[Research Goal: Apply quantum methods to bank deposits via Accounting View of Money] --> B[Input Data: Bank Balance Sheets, Cash & Cash Equivalents, Macro Environment]
    B --> C[Decompose Demand Deposits into Debt-Deposits & Equity-Deposits Shares]
    C --> D[Map Deposit Wave-Particle Duality to Quantum Analytical Models]
    D --> E[Simulate Hybrid Balance Sheet Dynamics over Time]
    E --> F[Outcome: Quantified Economic Information & Dynamic Hybrid Money Profiles]