Related papers: From Physics to Economics: An Econometric Example …
We demonstrate how information in the form of observable data and moment constraints are introduced into the method of Maximum relative Entropy (ME). A general example of updating with data and moments is shown. A specific econometric…
The application of principles of thermodynamics and statistical mechanics to economic systems is considered in a broad historical perspective, extending from prehistoric times to the present day. The hypothesis of maximum entropy production…
This is an invited article for the Discussion and Debate special issue of The European Physical Journal Special Topics on the subject "Can Economics Be a Physical Science?" The first part of the paper traces the personal path of the author…
Most of the econometric and econophysics models have been borrowed from the statistical physics, and as a cosequence, a new interdisciplinary science called econophysics has emerged. In this paper we planned to extend the analogy between…
It is known that the Maximum relative Entropy (MrE) method can be used to both update and approximate probability distributions functions in statistical inference problems. In this manuscript, we apply the MrE method to infer magnetic…
Econophysics is a new area developed recently by the cooperation between economists, mathematicians and physicists. It's not a tool to predict future prices of stocks and exchange rates. It applies idea, method and models in Statistical…
Entropy is a very useful concept from physics that tries to explain how a system behaves from a point of view of the thermodynamics. However, there are two ways to explain entropy, and it depends on if we are studying a microsystem or a…
This paper presents a conceptual model describing the medium and long-term co-evolution of natural and socio-economic subsystems of Earth. An economy is viewed as an out-of-equilibrium dissipative structure that can only be maintained with…
A vast concourse of events and phenomena occur in nature that may be interrelated by a entropy-maximization technique that provides a comprehensible explanation of a range of physical problems, integrating in a new framework the universal…
The paper present one of attempts to apply the thermodynamics laws to economics. Introducing common thermodynamic parameters and considering world economics as a one macrosystem, authors demonstrate the possible consequences of entropy…
In the present paper, we identify several distributions from Physics and study their applicability to phenomena such as distribution of income, wealth, and expenditure. Firstly, we apply logistic distribution to these data and we find that…
Physical analogs have shown considerable promise for understanding the behavior of complex adaptive systems, including macroeconomics, biological systems, social networks, and electric power markets. Many of today's most challenging…
Econophysics is an approach to quantitative economy using ideas, models, conceptual and computational methods of statistical physics. In recent years many of physical theories like theory of turbulence, scaling, random matrix theory or…
The method of Maximum (relative) Entropy (ME) is used to translate the information contained in the known form of the likelihood into a prior distribution for Bayesian inference. The argument is guided by intuition gained from the…
The theory of thermal macroeconomics (TM) analyses economic phenomena within the mathematical framework of classical thermodynamics, using a set of axioms that apply to the purely macroscopic aspects of an economy [CM]. The theory shows…
For this special issue, the article aims at discussing a few econophysics problems studied so far rather successfully. The following "applications" in micro-econo-physics are considered : (i) financial crashes; it is emphasized that one can…
An axiomatic approach to macroeconomics based on the mathematical structure of thermodynamics is presented. It deduces relations between aggregate properties of an economy, concerning quantities and flows of goods and money, prices and the…
In this paper the general principles and categories of mixed economy that currently exist in almost all countries of the world are presented. The paper also presents an Advanced Model of Mixed Economy with Threshold (AMMET), which is…
In recent years there has been a closer interrelationship between several scientific areas trying to obtain a more realistic and rich explanation of the natural and social phenomena. Among these it should be emphasized the increasing…
The report attempts of apply econophysics concepts to the Eurozone crisis. It starts by examining the idea of conservation laws as applied to market economies. It formulates a measure of financial entropy and gives numerical simulations…