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Econophysics and Data Driven Modelling of Market Dynamics pp 237–286Cite as

Physicists’ Approaches to a Few Economic Problems

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Part of the book series: New Economic Windows ((NEW))

Abstract

We review some of the recent approaches and advances made by physicists in some selected problems in economics, given that this interdisciplinary field popularly called “Econophysics” is now two decades old. These approaches, mainly originating from statistical physics, have not been free of drawbacks and criticisms, but we intend to discuss these advancements and highlight some of the promising aspects of this research. We hope the readers will be able to judge the positive impact that these efforts have created; perhaps even improve the methods and the results or remove the shortcomings, and eventually strengthen the field with their inputs.

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Notes

  1. 1.

    The term was coined by the American physicist, H. Eugene Stanley, in a conference on statistical physics in Kolkata (erstwhile Calcutta) in 1995, and first appeared in its proceedings published in the Journal Physica A (1996).

  2. 2.

    The term was first used by the French physicist, S. Galam, and appeared in an article published in 1982.

  3. 3.

    We often use for simplicity the terms “equilibrium” or “steady state” interchangeably, though for systems that are “non-ergodic”, strictly speaking one should only use the term “steady state”.

  4. 4.

    This consists of the net value of assets (financial holdings and/or tangible items) owned at a given instant.

  5. 5.

    This is believed to be consistent with the general observation that, in market economies, wealth is much more unequally distributed than income [46].

  6. 6.

    Self-organization also occurs in other market models when there is restriction in the commodity market [63].

  7. 7.

    Note that banks are not included in the side of firms, even if they are borrowing from other banks. Because our dataset includes banks’ borrowing only partially, the interbank credit is not considered here, though it is no less important than the bank-firm credit studied here.

  8. 8.

    The National Tax Agency Annual Statistics Report. Other major sources are Establishment and Enterprise Census by the Ministry of Internal Affairs and Communications, and the Ministry of Justice’s records on the entry and exit of firms, which are said to have under—or over-estimation problems due to the counting of non-active firms and so forth.

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Acknowledgments

The authors would like to thank all their collaborators and students, whose works have been presented here. AG would like to thank B.K. Chakrabarti and S. Biswas for careful reading of the manuscript and useful comments. YF is supported in part by the European Community Seventh Framework Programme (FP7/2007–2013) under Socio-economic Sciences and Humanities, Grant agreement No. 255987 (FOC-II), by the Program for Promoting Methodological Innovation in Humanities and Social Sciences by Cross-Disciplinary Fusing of the Japan Society for the Promotion of Science, by Grant-in-Aid from the Zengin Foundation for Studies on Economics and Finance, and also by Grant-in-Aid for Scientific Research (B) No. 22300080 of the Ministry of Education, Science, Sports and Culture, Japan. JI thanks Enrico Scalas, Naoya Sazuka and Giacomo Livan for critical discussions and useful comments. He also acknowledges the financial support by Grant-in-Aid for Scientific Research (C) of Japan Society for the Promotion of Science, No. 22500195 and No. 25330278.

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Authors and Affiliations

  1. School of Computational and Integrative Sciences, Jawaharlal Nehru University, New Delhi, 110067, India

    Anirban Chakraborti

  2. Graduate School of Simulation Studies, University of Hyogo, Kobe, 650-0047, Japan

    Yoshi Fujiwara

  3. Condensed Matter Physics Division, Saha Institute of Nuclear Physics, 1/AF Bidhannagar, Kolkata, 700064, India

    Asim Ghosh

  4. Graduate School of Information Science and Technology, Hokkaido University, N14-W9, Kita-Ku, Sapporo, 060-0814, Japan

    Jun-ichi Inoue

  5. The Institute of Mathematical Sciences, CIT Campus, Taramani, Chennai, 600113, India

    Sitabhra Sinha

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  5. Sitabhra Sinha
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Correspondence to Anirban Chakraborti .

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  1. Laboratory of Mathematics Applied to System, CentraleSupélec, Châtenay-Malabry, France

    Frédéric Abergel

  2. Department of Physics, Kyoto University, Kyoto, Japan

    Hideaki Aoyama

  3. Saha Institute of Nuclear Physics, Kolkata, India

    Bikas K. Chakrabarti

  4. School of Computational and Integrative Sciences, Jawaharlal Nehru University, New Delhi, India

    Anirban Chakraborti

  5. Saha Institute of Nuclear Physics, Kolkata, India

    Asim Ghosh

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Chakraborti, A., Fujiwara, Y., Ghosh, A., Inoue, Ji., Sinha, S. (2015). Physicists’ Approaches to a Few Economic Problems. In: Abergel, F., Aoyama, H., Chakrabarti, B., Chakraborti, A., Ghosh, A. (eds) Econophysics and Data Driven Modelling of Market Dynamics. New Economic Windows. Springer, Cham. https://doi.org/10.1007/978-3-319-08473-2_11

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