Physics - Econophysics


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Introduction

  • Econophysics is an interdisciplinary science that studies the dynamic behavior of finance and economic markets.

  • In order to solve the problems of economics and also to understand the dynamic behavior of the market, the econo-physicists develop applied theories.

Econophysics
  • Econophysics, sometime, is also known as the physics of finance.

  • It applies statistical mechanics for the economic analysis.

Econophysics Questions

  • The econophysics questions include −

    • How to accurately measure and explain the significant properties of market dynamics?

    • How to stabilize the markets?

    • What are the different behaviors in different markets?

Tools of Econophysics

  • The fundamental tools of econophysics are −

    • Probabilistic method

    • Statistical method

    • These two methods are borrowed from statistical physics.

  • Other tools taken from Physics

    • Fluid dynamics

    • Classical mechanics

    • Quantum mechanics

Models of Econophysics

  • Following are the major models those are used in Econophysics −

    • Percolation Model

    • Percolation Model
    • Kinetic exchange models of markets

    • Chaotic models

    • Information theory

    • Random matrix theory

    • Diffusion theory



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