A small step towards unification of economics and physics
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A small step towards unification of economics and physics Subhendu Bhattacharyya1 Received: 29 October 2019 / Accepted: 6 October 2020 © Springer-Verlag GmbH Germany, part of Springer Nature 2020
Abstract Unification of natural science and social science is a centuries-old, unmitigated debate. Natural science has a chronological advantage over social science because the latter took time to include many social phenomena in its fold. History of science witnessed quite a number of efforts by social scientists to fit this discipline in a rational if not mathematical framework. On the other hand a tendency among some physicists has been observed especially since the last century to recast a number of social phenomena in the mould of events taking place in physical world and governed by well-known systems and equations of physics. It necessitated the introduction of social physics as a new inter-disciplinary subject. Obviously this attempt is aimed at explaining hitherto unsolved or highly debated issues of social science. Physicists are showing special interest on problems on economics, ranging from some topics of normative economics to the movement of prices of derivatives. Statistics has been widely used in these attempts and at least two sub-disciplines of the subject, namely, stochastic process and time series analysis deserve special mention. All these research activities gave birth to another inter-disciplinary subject named as econophysics. Interestingly, global financial crisis of 2007–08 has revived the need of determination of prices of derivatives in a more accurate manner. This article adumbrates a sketch of the theoretical synthesis between physics and economics and the role played by statistics in this process. Keywords Econophysics · Mathematization of economics · Monte Carlo simulation · Social physics · Statistical inference · Stochastic process
The author is grateful to the anonymous reviewers for their insightful comments. * Subhendu Bhattacharyya [email protected] 1
New Business and Actuarial Department, Life Insurance Corporation of India, Eastern Zonal Office, L.I.C.I. Staff Quarters, 1‑1 Gorachand Road, Flat No. A‑11, Kolkata, West Bengal 700014, India
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1 Introduction Integration of science obviously entails unification of natural science and social science. K. Popper was of the opinion that theories of social science more than often offer an approximation of the real picture (Popper 2002, p. 319); he referred to the concept of verisimilitude in this context. To him it was the Theory of Relativity which became victorious among Einsteinian mechanics, Marxian discourse, Freudian analysis and Adlerian activity. While working as an assistant of A. Adler he faced the propaganda ‘save the phenomenon’ personally for the first time in his life (Popper 2002, pp. 45–6). As an incisive critic Popper analytically contradicted the theory of historical inevitability, one of the main planks of Marxism, in his ‘Poverty of Historicism’ (Popper 1957). Status of b
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