The idea of explaining economic phenomena with physics is not as new as one might think. In the second half of the century, Pareto, an Italian engineer who spent many years of his career in Switzerland, turned to economics, armed with a good knowledge of classical Newtonian mechanics and a keen desire to describe social motions as physics describes the motion of the planets. Thus, he took the first important steps in this regard. Indeed, Pareto liked to compare Kepler's laws with new economic laws yet to be discovered. The Pareto law of wealth distribution is now a standard piece of economic information. However, the reduction of economic laws to something akin to Newton's laws of mechanics remained a dream come true for some people and a Fata Morgana for others. However, physics changed completely after the discovery of the theory of relativity and quantum mechanics at the beginning of the 20th century. Naturally, the question arose: If the old Newtonian physics were found insufficient to explain complex systems such as society and the economy, does the same hold true for the new physics of Einstein and Schrödinger? Or does the new physics open up new ways of understanding complexity scientifically? This course is designed as an interdisciplinary field of study that applies the methods of physical and economic sciences together.
The course content is as follows, week by week: Introduction, Empirical Econophysics and Stylized Phenomena, Stochastic Models, Basic Factor Models, Orderbook Dynamics, Minority Game, Network Economics; Wealth, Poverty and Growth, Pareto and Gilbrat Laws, Singular Income, Business Growth, Social Organization.