Abstract
This paper presents an overview of some recent applications of methods of statistical physics to financial problems such as stock market behaviour and crashes. This field of research has seen intensive developments over the last ten years and is today known as econophysics. The first section of the paper oers a review of the main directions of research in experimental, theoretical, and applied econophysics. A second section then introduces a case study of physical modelling of a financial event, namely a stock market crash seen as a higher order phase transition. The model used is the Ising model in Bethe–Peierls (‘quasi chemical’) approximation. In spite of its minimal character, the model exhibits a statistical pattern of stock market prices consistent with that observed empirically.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
