Following a recent addition of a rather complex mathematical scientific paper concerning Forex trading, today, I introduce an article originating in physics or, more precisely, in econophysics.
Soloviev V. from Cherkasy National University and Saptsin V. from Kremenchug National University are trying to carry the philosophy of general relativity and
First, they introduce some of the basic physical notions and explain the philosophy behind them. Then they discuss how these notions and concepts can be transferred to the field of economics. They draw analogies from the concept of mass, speed, energy and Planck constant. In the experimental part, they analyze three different groups, each of them consisting of three time series: gold, silver and oil for commodities; USD/JPY, GBP/USD and USD/CHF for currencies; S&P500, FTSE100 and BVSP for stocks. Daily values of the period from April 27, 1993 to March 31, 2010 are used. The authors calculate “economic mass” of the time series, “economic temperature” and “economic Planck constant”. Interestingly, their economic mass seems to be higher for the less volatile time series and lower for the more volatile ones. Their temperature parameter rises high during crises and stays low during normal times.
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