Worrying trends in econophysics

Gallegati, Mauro; Keen, Steve; Lux, Thomas; Ormerod, Paul

doi:10.1016/j.physa.2006.04.029

Cited by 192 publications

(192 citation statements)

References 15 publications

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“…Gallegati, Keen, Lux, and Ormerod [1] Since the authors of "Worrying" [1] begin with an attack on assumptions of conservation of money and analogs of conservation of energy in economic modelling, let me state from the outset that it would generally be quite useless to assume conserved quantities in economics and finance (see [4], Ch. 1).…”

Section: Money Conservation Laws and Neo-classical Economicsmentioning

confidence: 99%

“…The paper by Bak et al tried to bridge the gap between standard economic theory and econophysics but was too ambitious, the gap is a chasm. This leads into another concern expressed in [1], that ideas of production in economics theory are ignored by econophysicists. The problem with that criticism is that neo-classical models of production are no better than neo-classical exchange models: there is inadequate or nonexisting empirical basis for any neo-classical assumption.…”

Section: Money Conservation Laws and Neo-classical Economicsmentioning

confidence: 99%

“…Simon wrote many words but produced no mathematical market model. His paper on asymmetric distributions [1] is not an anticipation of econophysics. Levy distributions are generally asymmetric, exponential distributions are generally asymmetric, so are nearly all distributions.…”

Section: Was Econophysics Previously Anticipated?mentioning

confidence: 99%

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Response to “Worrying Trends in Econophysics”

McCauley

2006

Physica A: Statistical Mechanics and its Applications

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This article is a response to the recent "Worrying Trends in Econophysics" critique written by four respected theoretical economists [1]. Two of the four have written books and papers that provide very useful critical analyses of the shortcomings of the standard textbook economic model, neo-classical economic theory [2,3] and have even endorsed my book [4]. Largely, their new paper reflects criticism that I have long made [4,5,6,7,] and that our group as a whole has more recently made [8]. But I differ with the authors on some of their criticism, and partly with their proposed remedy.

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Section: Money Conservation Laws and Neo-classical Economicsmentioning

confidence: 99%

Section: Money Conservation Laws and Neo-classical Economicsmentioning

confidence: 99%

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Response to “Worrying Trends in Econophysics”

McCauley

2006

Physica A: Statistical Mechanics and its Applications

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“…He presents a broad overview of econophysics methods and approaches. While deeply sympathetic, he does not hesitate to point out problems with certain approaches, echoing the critiques he put forth with others quite recently (Gallegati et al, 2006). A centerpiece of this chapter is showing how when econophysicists fall into using orthodox economic theory as a foundation for their modeling, this can lead them into making drastically incorrect forecasts about fi nancial market dynamics and futures.…”

Section: What Is In This Book?mentioning

confidence: 94%

Introduction

Rosser¹

2009

Handbook of Research on Complexity

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“…The interplay between size, growth-rate and movement distributions should be used to calibrate these models. Even more so since within the economic literature, econophysical generative models have been criticized for lacking proper statistical methodology (Gallegati et al 2006). So there is a need for empirically-based quantitative descriptions to better inform model design.…”

Section: Models Of Organizational Growth Processesmentioning

confidence: 99%

Sector, industry and inter-organizational movement statistics in the Stockholm Region: informing organizational growth models

Mondani

2018

Qual Quant

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Organizational growth processes exhibit interesting statistical regularities, chiefly the heavy-tailed pattern of the size and growth-rate (i.e. yearly change in size) distributions. In spite of its ubiquity, empirical studies of growth are often limited to private activities and specific sectors, and generative models on the other hand are built on simplified assumptions and only aim at reproducing stylized facts. In this study, we use a unique Swedish longitudinal database on employment in the Stockholm Region, to analyze the interplay between organizational growth statistics by ownership sector, industrial activity and interorganizational employee movements during a period of 14 years. We fit distributions for organizational size and growth rates. We find that the body of the aggregate growth-rate distribution is dominated by public sector growth, while the private sector dominates the tails. Industries with mostly public organizations tend to have a lognormal size distribution, while privately-owned industries are better fitted by a truncated power law. Growthrate distributions are fitted to an exponential power (Subbotin) distribution. We decompose the change in size into incoming and outgoing employee movements, and find that the distribution of aggregated movements is well approximated by a lognormal distribution. Most organizations that do not grow have however in-and outgoing movements, but these mostly cancel each other out.

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Worrying trends in econophysics

Cited by 192 publications

References 15 publications

Response to “Worrying Trends in Econophysics”

Response to “Worrying Trends in Econophysics”

Introduction

Sector, industry and inter-organizational movement statistics in the Stockholm Region: informing organizational growth models

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