Note on log-periodic description of 2008 financial crash

TL;DR

This paper applies a log-periodic function model to analyze the 2008 financial crash across multiple markets, exploring connections to critical phenomena theory in physics.

Contribution

It introduces a log-periodic modeling approach to describe the 2008 financial crash in various markets, linking financial phenomena to physics concepts.

Findings

Log-periodic patterns observed in market indices before the crash

Potential relation between critical phenomena and financial market behavior

Modeling results support the applicability of physics-inspired models in finance

Abstract

We analyze the financial crash in 2008 for different financial markets from the point of view of log-periodic function model. In particular, we consider Dow Jones index, DAX index and Hang Seng index. We shortly discuss the possible relation of the theory of critical phenomena in physics to financial markets.