The (unfortunate) complexity of the economy
- from physicsworld.com
Physicists, however, feel uncomfortable with theories not borne out by (or even blatantly incompatible with) empirical data. But could the methodology of physics really contribute to the much-awaited paradigm shift in economics? Such an approach is called econophysics (a term coined in 1995 by Boston physicist Gene Stanley), a field that effectively emerged from a famous 1987 conference between physicists and economists held at the Santa Fe Institute. After 20 years or so of “econophysics”, and about 1000 papers published on the arXiv preprint server (a new section “Quantitative Finance” was created in December 2008), it is perhaps useful to give a personal bird’s eye view of what has been achieved so far and what might be taught, in the long run, in order to foster a better grasp of the complexity of economic systems.Jean-Philippe-Bouchaud is head of research at Capital Fund Management and a professor at the Ecole Polytechnique, both in Paris, France.
In the April edition of Physics World, Jean-Philippe Bouchard, gives a topical overview of the burgeoning field of econophysics . . .