Related papers: Economics need a scientific revolution

During its history, the ultimate goal of economics has been to develop similar frameworks for modeling economic behavior as invented in physics. This has not been successful, however, and current state of the process is the neoclassical…

This article is a follow-up of a short essay that appeared in Nature 455, 1181 (2008) [arXiv:0810.5306]. It has become increasingly clear that the erratic dynamics of markets is mostly endogenous and not due to the rational processing of…

The paper argues that attracting more economists and adopting a more-precise definition of dynamic complexity might help econophysics acquire more attention in the economics community and bring new lymph to economic research. It may be…

The Internet and Social Media change our way of decision-making. We are no longer the independent decision makers we used to be. Instead, we have become networked minds, social decision-makers, more than ever before. This has several…

In an informal way, a number of thoughts on the financial crisis 2008 are presented from a physicist's viewpoint, considering the problem as a nonergodicity transition of a spin-glass type of system. Some tentative suggestions concerning…

In this review article we explore several recent advances in the quantitative modeling of financial markets. We begin with the Efficient Markets Hypothesis and describe how this controversial idea has stimulated a number of new directions…

This article is a response to the recent Worrying Trends in Econophysics critique written by four respected theoretical economists. Two of the four have written books and papers that provide very useful critical analyses of the shortcomings…

Crashes have fascinated and baffled many canny observers of financial markets. In the strict orthodoxy of the efficient market theory, crashes must be due to sudden changes of the fundamental valuation of assets. However, detailed empirical…

The quantitative aspirations of economists and financial analysts have for many years been based on the belief that it should be possible to build models of economic systems - and financial markets in particular - that are as predictive as…

We consider dynamics of financial markets as dynamics of expectations and discuss such a dynamics from the point of view of phenomenological thermodynamics. We describe a financial Carnot cycle and the financial analogue of a heat machine.…

In university programs and curricula, in general we react to the need to meet market needs. We respond to market stimulus, or at least try to do so. Consider now an inverted view. Consider our data and perspectives in university programs as…

Standard economic theory uses mathematics as its main means of understanding, and this brings clarity of reasoning and logical power. But there is a drawback: algebraic mathematics restricts economic modeling to what can be expressed only…

The recent crisis and the following flight to simplicity put most derivative businesses around the world under considerable pressure. We argue that the traditional modeling techniques must be extended to include product design. We propose a…

In the last decade a new generation of telescopes and sensors has allowed the production of a very large amount of data and astronomy has become, a data-rich science; this transition is often labeled as: "data revolution" and "data…

Mathematics enters the period of change unprecedented in its history, perhaps even a revolution: a switch to use of computers as assistants and checkers in production of proofs. This requires rethinking traditional approaches to mathematics…

The author of this letter to the editor would like to set forth the argument that scientometrics is currently in a phase in which a taxonomic change, and hence a revolution, is taking place. One of the key terms in scientometrics is…

This paper argues that the fundamental principle of contemporary financial economics is balanced reciprocity, not the principle of utility maximisation that is important in economics more generally. The argument is developed by analysing…

We describe the innovations in finances, introduced over the recent decades, and analyze most of the business and regulatory challenges, faced by the financial industry, because of the present disruptive changes in the global capital…

How are economies in a modern age impacted by epidemics? In what ways is economic life disrupted? How can pandemics be modeled? What can be done to mitigate and manage the danger? Does the threat of pandemics increase or decrease in the…

We argue that the present crisis and stalling economy continuing since 2007 are rooted in the delusionary belief in policies based on a "perpetual money machine" type of thinking. We document strong evidence that, since the early 1980s,…