Reply to Guy:
you touched on an interesting theme. Over the past few years I dealt with
works / theories of econophysicists in an attempt to approach business
cycles (i.e. large scale fluctuations in economy) from different standpoint
than the neoclassical economics (NCE). Working papers from SFI and published
stuff in Physica A are providing a fresh and intriguing perspective indeed,
compared to NCE. Econophysicists had most success (in my opinion) in
modeling financial markets and here they are, I believe, definitively
superior to NCE models.
After a closer look at their models outside financial markets, I got the
impression that their major contribution to the field consist of introducing
nonlinear models and computer simulation (fine example are the works of Paul
Ormerod and co-workers in Physica A). Although their models has been freed
from flawed NCE assumptions, they are mechanical, highly reductionist and
with almost no feeling for what may be relevant in economic realm (except
for P. Ormerod, and of course B. Arthur and probably some other guys). For
example some models (Amaral et .al, 1998; Matia et al. 2004) suggest that
economic dynamics arises from the interplay of internal diversification of
firms into various divisions and their random multiplicative growth. In my
view this is absolute nonsense. Eugene Stanley himself recognized that
empirical results obtained in econophysics still lack firm theoretical
foundations and, according to economist S. Durlauf, econophysicist's models
generally lack economic insight. As I see it, econophysics like the earlier
Newtonian paradigm which lies at the basis of NCE, cannot provide a
satisfactory paradigm for social sciences: we have just moved the focus from
equilibrium to nonequlibrim thinking and modeling. Socio-economic change and
evolution cannot be reduced to aggregate flows and stocks which have an
"intrinsic" dynamics and are unrelated to institutional framework and
historical time. Some other arguments are in the earlier postings on SOC
(replies to Bob and Stan). More details are available in two papers if
anyone is interested.
The very best
Igor
----- Original Message -----
From: Guy A. Hoelzer
To: 'fis-listas.unizar.es'
Sent: Wednesday, June 01, 2005 5:57 PM
Subject: [Fis] Econophysics
I may have missed it, but I have been surprised that the recently emerged
discipline of econophysics has not yet received much attention during this
FIS session. This discipline is being forged by the work of physicists like
Eugene Stanley and economists like Brian Arthur, and it is founded on the
notion that economies can be better understood as self-organizing complex
dynamical systems governed by the rules of physics. I am personally
optimistic about the value of this approach to understanding economics, but
I don't know enough about it to make a good argument for it here. I hope
that this post will help to stimulate some discussion about econophysics in
this forum.
Regards,
Guy Hoelzer
Department of Biology
University of Nevada Reno
Reno, NV 89557
Phone: 775-784-4860
Fax: 775-784-1302
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Received on Thu Jun 2 12:28:38 2005
