Noted books in econophysics: the 2000 Econophysics: Correlations and Complexity in Finance, by Rosario Mantegna and Eugene Stanley, the 2006 Econophysics and Sociophysics, with chapters by German physicist Jurgen Mimkes, e.g. “A Thermodynamic Formulation of Social Science”, and the 2012 Econophysics, with an end chapter by Romanians economist and econophysicist Gheorghe Savoiu and physicist and sociophysicist Ion Siman’s entitled “Sociophysics: A New Science or a New Domain for Physicists in a Modern University”, both outline the newly growing science of sociophysics. [8] |
“The author advances the theory termed ‘econophysics’ in which the economy of a nation is based on the ‘quantum unit’ dollars.”
“Behavior of large numbers of humans (as measured, e.g. by economic indices) might conform to analogs of the scaling laws that have proved useful in describing systems composed of large numbers of inanimate objects.”In 2011, Taiwanese economists Shu-Heng Chen and Sai Ping Li, in their “Econophysics: Bridges over a Turbulent Current”, argued that economics and physics were two shores of a turbulent river: [19]
Taiwanese economists Shu-Heng Chen and Sai Ping Li's 2011 take on econophysics in modern and historical retrospect (see also: Map of Physics). [19] |
“Despite their very different ages, physics and economics have been developed and extended along the two sides of the same river for a long time. Crossing the river signifies the efforts made to connect the side of physics with the side of economics, or more generally, the side of the natural sciences and the side of the social sciences.”
More than one century ago, crossing the river had already started, but over the years, particularly in recent years, the scale and organization of the crossings have changed, from individuals to communities and from traveling to immigrating. To facilitate such a massive crossing, bridges have also been built over the river. The academic community currently known as econophysics can be regarded as an emerging society after these crossings and the ensuring immigration. All organized conferences and journals (publications) related to this community are bridges.”
“In 1995, Eugene Stanley coined the phrase ‘econophysics’ at a meeting in India. At about the same time, Yi-Cheng Zhang and his group introduced the econophysics webpage: unifr.ch/econophysics. Simon Capelin at Cambridge University Press led the charge by publishing Stanley’s and other econophysics books. His program there is still strong. Sadly, econophysics, like nonlinear dynamics, was never recognized by the APS as part of physics. American physics prefers (nonfalsifiable) string theory to falsifiable approaches to social problems. My university offers one of the only econophysics PhD programs in the world.”— Joseph McCauley (2008), “Emergence of Finance Theory and Econophysics” [16]
“Through its physics publishing director, Simon Capelin, Cambridge University Press played a pioneering role in the development of econophysics.”— Bernard Roehner (2007), Driving Forces in Physical, Biological and Socio-Economic Phenomena [17]
“Econophysics does NOT literally apply laws of physics, such as Newton’s laws or quantum mechanics, to humans. It uses mathematical methods developed in statistic physics to study statistical properties of complex economic systems consisting of a large number of humans.”
Thims' 2011 List of Greatest Econophysicists 1. Léon Winiarski (1894) – explains socioeconomics via Clausius and Lagrange.
2. Thomas Hobbes (1651) – uses mechanics to explain society.
3. Dimitris Keranis (2005) – argues that the Gibbs function governs economic activity.
4. Emanuele Sella (1910) – was one of the first to discuss economic temperature via Clausius.
5. Julius Davidson (1919) – argues that economics activity is an equilibrium adjusting reaction.
6. Frederick Soddy (1911) – gave Clausius-based Cartesian economics lectures.
7. Thomas Wallace (2009) – outlines a mechanistic-thermodynamics based socioeconomics.
8. Nicholas Georgescu (1966) – outlines a free energy/bound energy material resource theory.
9. Philip Mirowski (1984) – a very critical physical economics historian.
10. Philip Ball (2001) – is a modern citation linchpin of social physics and econophysics.
“There are no econophysicists in that list.”— Joseph McCauley (2011), Econophysics Forum thread comment [14]
A 2017 econophysics cartoon. (Ѻ) |
“Econophysics was from the beginning the application of the principles of physics to the study of financial markets, under the hypothesis that economic world behaves like a collection of electrons or a group of water molecules that interact with each other, and the econophysicists are always considered that, with new tools of statistical physics, and the recent breakthroughs in understanding chaotic systems, they are making a controversial start at tearing up some perplexing economics and reducing them to a few elegant general principles with the help of some serious mathematics borrowed from the study of disordered materials.”
“Physicists often model economic interactions like collisions of atoms in gases: by interaction one agent gains, the other loses. This leads to a Boltzmann distribution of capital, which has been observed in wealth distributions of different countries. However, economists object: no economic agent will attend a market in which he gets robbed! This conflict may be resolved by writing basic laws of economics into terms of calculus. In these terms the daily struggle for survival of all economic systems turns out to be a Carnot cycle that is driven by energy: heat pumps and economic production depend on oil, GNP and oil consumption run parallel for all countries. Motors and markets are based on the same laws of calculus (macro-economics) and statistics (micro-economics). Economic interactions mean exploiting a third party (nature) and are indeed close to robbing! A baker sells bread to his customers, but the flour comes from nature. Banks sells loans to investors, but the money comes from savers. Econo-thermodynamics is a thrilling new interdisciplinary field.”
Above: German econophysics PhD German Lars Seemann’s 2011 power point style definition of econophysics, a student at the University of Houston's econophysics program since 2007, which he defines economics plus physics. [7] Right: the 2010 Econophysics: an Introduction by Sitabhra Sinha, Arnab Chatterjee, Anirban Chakraborti, and Bikas Chakrabarti. [11] |
See main: American school of econophysicsIn the 2000s, fledgling econophysics schools and or groups began to emerge at the UC Davis (person, date), University of Maryland (Victor Yakovenko, c.2000), where the Maxwell-Boltzmann distribution is used, and University of Houston (Joseph McCauley, c. 2005).
“I seek general analogies between economics and physics.”— Ragnar Frisch (c.1930) (Ѻ)
“I believe that economic laws can be formulated similar to the laws in thermodynamics.”— Michael Kalecki (c.1950) (Ѻ)
“I believe that microscopic market simulations have an important role to play in economics and finance. If it takes people from outside economics and finance – perhaps physicists – to demonstrate this role it won’t be for the first time that outsiders have made substantial contribution to these fields.”— Harry Markowitz (c.1998), comment on draft of chapter “Microscopic Market Simulations” by Dietrich Stauffer et al [18]
“Econophysics is still unrecognized as science by the American Physical Society.”— Joseph McCauley (2009), Dynamics of Markets [8]
“My background is physics and solid-state thermodynamics. My present field is ‘physical economics’, especially macro and microeconomics, and finance. My time invested in this interdisciplinary work is 100%. I have trouble calling my field ‘econophysics’, as this only covers finance.”
— Jurgen Mimkes (2019), “Answer to Question #1”; cited by Kishore Dash (2019) in The Story of Econophysics (pg. 182)