Michael Covel speaks with Emanuel Derman on today’s podcast. Derman is a South African-born businessman and writer, best known as a quantitative analyst. His books include My Life As A Quant: Reflections on Physics and Finance as well as Models Behaving Badly. Derman is a Columbia University professor and formerly at Goldman Sachs. Covel and Derman discuss why economics can be an ‘incestuous’ field; economics as a moral science; why all four of the US investment banks were not allowed to go by the wayside; Derman’s background and his PhD in theoretical physics; Derman’s early eye-opening experiences at Goldman Sachs; model building, and how Derman was indoctrinated into the world of model building; the financial model and science and the physics model and science; short volatility models vs. long volatility models; how one estimates risk; models vs. theories; whether Derman finds a certain amount of pushback from others in the academic community. For more information on Emanuel Derman, visit emanuelderman.com.