Papers that changed the world, from Einstein to Li

In science, and in other academic disciplines like economics, research is published in the form of papers. A paper is typically around 10 pages long and announces a new discovery, a new idea, etc.  Famously, in his annus mirabilis of 1905, Einstein wrote 3 papers that changed the world, in a (mostly) good way.

You can see an English translation of perhaps the most famous of the 3 papers – the one that introduced what we now know as relativity. This introduced the infamous equation E = mc2. It changed the way we view the world, and the way we understand matter which we now know can be turned into energy. It also unfortunately showed the way to make nuclear bombs.

Ninety five years afyer Einstein’s annus mirabilis, one David X. i published a paper with the non-too-catchy title On Default Correlation: A copula function approach. This paper is much less famous. But the book I am reading on the 2008 crisis, Whoops!, suggests that this paper also paved the way for a big bang, and resulting large crater. But the bang was financial and the large crater is in taxpayers’ pockets.

Einstein’s famous equation is true, and as far as I know, exact (perhaps assuming those neutrinos are not in fact exceeding the speed of light). Li’s equation is highly approximate. It involves a number of assumptions that the banks’ very highly paid traders assumed were true, but should have known were not. As a consequence of this assumption they massively underestimated the risk of complex packages of debt, with consequences that we all know about.

So, academic papers can clearly change the world, for good or ill. I guess papers like Einstein’s that are true, and are truly important ones do both. They have both good and bad effects, but hopefully mostly good, whereas papers that make dodgey assumptions can easily do a lot more harm than good. This is particularly true if people ignore the assumptions made.