Econophysics: Comments on a few Applications, Successes, Methods, & Models

TL;DR

This paper reviews successful applications of econophysics in financial crashes, portfolio management, currency exchange, and asset pricing, highlighting distinctions between endogenous and exogenous factors and discussing macroeconomic issues.

Contribution

It provides a comprehensive overview of econophysics applications, emphasizing distinctions between endogenous and exogenous causes and suggesting future research directions.

Findings

Successful modeling of financial crashes distinguishing causes

Application of econophysics to portfolio control and risk

Analysis of currency exchange and macroeconomic issues

Abstract

For this special issue, the article aims at discussing a few econophysics problems studied so far rather successfully. The following "applications" in micro-econo-physics are considered : (i) financial crashes; it is emphasized that one can distinguish between endogenous and exogenous causes; (ii) portofolio control, selection and inherent risk measure; (iii) foreign currency exchanges, also distinguishing endogenous and exogenous money control; (iv) price and asset evolution values. It is shown that some macro-econo-physics problem have been also tackled, like geographic/political constraints, the globalization of the economy and country clustering. Moreover, it is daring to suggest prospect for studies and researches, whence presenting some selection of a few interesting perspectives.