THEORY AND CONCEPT OF ECONOPHYSICS

Back to Page Authors: Ravindra Thakur

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Keywords: Econophysics, Conservation, Work, Energy

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Abstract: Through this paper, we try to correlate and explain how Physics of Economics (Finance), goes hand in hand. One cannot exist without the other. When we deal or talk of finance it’s imperative to talk of economics and terms related to it. The term econophysics is often referred to the methods and tools traditionally introduced and developed in the field of statistical and theoretical Physics to study problems related to economics. Physics is a basic or fundamental science which deals with natural laws. The Law of conservation of energy is considered as one of the basic laws of Physics which states “Energy can neither be created nor destroyed but can only change it’s form”. When we talk of energy in Physics (i.e. Work or energy = Force x displacement), it implies money in economics which could be inflow or outflow. But the net inflow or outflow must be constant or conserved.

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