IDEAS home Printed from https://ideas.repec.org/a/bla/finrev/v60y2025i3p657-666.html
   My bibliography  Save this article

The role of theory in finance research

Author

Listed:
  • Itay Goldstein

Abstract

Over the years, a big part of research in finance has been directed toward the development of new theories based on mathematical formalism. I review classic examples demonstrating the success of this approach, how it enabled transformation in analysis, and had spillovers to measurement, policy, and practice. I discuss the limitations of mathematical models and how these models should be evaluated. Finally, I argue that, despite the greater prevalence of data and empirical methods these days, there are still many opportunities for theory research. I provide some examples. Enabling these opportunities is critical for the continued progress of the field.

Suggested Citation

  • Itay Goldstein, 2025. "The role of theory in finance research," The Financial Review, Eastern Finance Association, vol. 60(3), pages 657-666, August.
    • Handle: RePEc:bla:finrev:v:60:y:2025:i:3:p:657-666
    DOI: 10.1111/fire.12443
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/fire.12443
    Download Restriction: no
    File URL: https://libkey.io/10.1111/fire.12443?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:finrev:v:60:y:2025:i:3:p:657-666. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/efaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.