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Publication Name: The Physics of Finance

Brief description: A look at economics and finance through the lens of physics.

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Joined: August 18th, 2011

Activity

The Physics of Finance wrote a new blog post titled Market complexity also makes for instability

Since the financial crisis of 2008, an explosion of research has aimed to understand what makes financial markets prone to sporadic crises. The potential sources of trouble are many, including debt and leverage, financial concentration and the problem of “too big to fail,” as well as perverse incentives for bankers to take on large risks. Markets go wrong in any of a thousand ways, and, unfortunately, it seems that understanding each one requires intimate familiarity with the fine details of...
(163 days ago)

The Physics of Finance wrote a new blog post titled The (un)Wisdom of Crowds

Does the Wisdom of Crowds work for elections? Should we think that the result of the British Brexit vote, because it was a free vote put to the people, was not only democracy in action, but also a wise method for a nation to make such a decision? I've touched on this matter in my latest Bloomberg View column, drawing on a new study on group decision making by researchers from the Santa Fe Institute and the Max Planck Institute for Human development in Berlin. This study asks under what...
(438 days ago)

The Physics of Finance wrote a new blog post titled Improve technology -- and still use more stuff overall??

A while back I had a brief argument with Paul Krugman and some other economists over economic growth and the future of the planet. It's common knowledge, of course, that human use of materials has grown over time -- globally, we now use more steel, plastic, glass, oil, water, etc. than ever before. We use more energy than ever before, and our agriculture puts more phosphorous and nitrogen into the oceans than ever before, and these trends toward more usage of physical stuff of every kind...
(582 days ago)

About:

This blog explores a growing revolution in the science of financial markets based on ideas and concepts from physics. If traditional economics has emphasized self-regulating processes and the concept of market equilibrium, the new perspective emphasizes the myriad positive feed backs which often drive markets away from equilibrium and cause tumultuous crashes and other crises.