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What 'econophysics' tells us about investing

Can physics explain how markets move?
July 15, 2024
  • Economists have borrowed from scientists since the earliest days of the discipline
  • Can physicists help us to make sense of huge volumes of market data?

Like many portmanteau words, 'econophysics’ is a strange hybrid term that doesn't exactly roll off the tongue. But economists have been borrowing from scientists since the very start.

In the 1700s, Adam Smith expounded about mechanics and engines in his works on the political economy. ‘Equilibrium’ (so central to economics courses taught today) leans on the idea that economies can reach an equilibrium in the same way that gases do

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