scale invariance economics

Inequalities for Stochastic Processes ( Mc Graw Hill, New York, 1965 ). In particular, we review two such new results. Scale invariance is ubiquitous in models1 of macroeconomics and finance, Costis Skiadas: c-skiadas@kellogg.northwestern.edu Firm sizes and assets sizes [4–6], industrial insurance claim sizes [7–9], economic damages due to natural catastrophes, such as hurricanes or earthquakes [10–11], stock market prices fluctuations in the short run and in the long run [2, 6, 12–14] etc. motivated by the experiments of Ellsberg (1961). arXiv:0902.3840v1 [q-fin.TR] 23 Feb 2009 Scale Invariance, Bounded Rationality and Non-Equilibrium Economics Samuel E. V´azquez Perimeter Institute for Theoretical Physics, 31 Caroline St. North, “Scale invariance” is not a common expression in economics, and expressions like “self similarity” or “self affinity” are scarcely used. Leroy E. and Osouf S., Assurances Catastrophes. This paper reviews models that are based on scale-invariance properties of high-Reynolds-number turbulence in the inertial range. We discuss a curious 'symmetry breaking' for values of ∑ above a certain threshold value ∑c; here ∑ is defined to be the local first moment of the probability distribution of demand Ω-the difference between the number of shares traded in buyer-initiated and seller-initiated trades. Zajdenweber D., Business Interruption Insurance, a Risky Business. Researchers have found new and surprising results by applying concepts and methods of scale invariance and universality to the economy. Mandelbrot B., The Pareto Levy Law and the Distribution of Income. Hence the common name “Pareto” for such a type of economic distributions. Scale invariance and universality in economic phenomena. By continuing you agree to the use of cookies. 2 Neither of these two new empirical laws has a firm theoretical foundation. Even “stable non gaussian laws” (or “Lévy laws”, or “Pareto-Lévy” laws) and “fractals”, introduced in economics by B. Mandelbrot [1–2], remain relativily unheard outside financial markets and research centers devoted to finance. We also mention some of the differences in the approaches taken and seek to justify these different approaches by developing the argument that by approaching the same problem from different points of view, new results might emerge. Isard W., Location and Space economy ( Wiley, New York, 1956 ). Actually, history of economics thought is full of scale invariant distributions, but under another name: Pareto. I 3rd ed Ed. Specifically, we discuss the two newly discovered scaling results that appear to be 'universal', in the sense that they hold for widely different economies as well as for different time periods: (i) the fluctuation of price changes of any stock market is characterized by a probability density function, which is a simple power law with exponent -4 extending over 102 standard deviations (a factor of 108 on the y-axis); this result is analogous to the Gutenberg-Richter power law describing the histogram of earthquakes of a given strength; (ii) for a wide range of economic organizations, the histogram that shows how size of organization is inversely correlated to fluctuations in size with an exponent ≈0.2. Dubins L.E. Copyright 2008 Elsevier B.V., All rights reserved. UR - http://www.scopus.com/inward/record.url?scp=0037061095&partnerID=8YFLogxK, UR - http://www.scopus.com/inward/citedby.url?scp=0037061095&partnerID=8YFLogxK, JO - Journal of Physics Condensed Matter, JF - Journal of Physics Condensed Matter, Powered by Pure, Scopus & Elsevier Fingerprint Engine™ © 2020 Elsevier B.V, "We use cookies to help provide and enhance our service and tailor content. We discuss a curious 'symmetry breaking' for values of ∑ above a certain threshold value ∑c; here ∑ is defined to be the local first moment of the probability distribution of demand Ω-the difference between the number of shares traded in buyer-initiated and seller-initiated trades. journal = "Journal of Physics Condensed Matter", https://doi.org/10.1088/0953-8984/14/9/301. Fama E., The Behavior of Stock Market Prices. 1Scale invariant and translation invariant inequality measures are also known as relative and absolute inequal-ity measures respectively. abstract = "This paper discusses some of the similarities between work being done by economists and by computational physicists seeking to contribute to economics. Cite as. / Stanley, H. E.; Amaral, L. A N; Gopikrishnan, P.; Plerou, V.; Salinger, M. A. T1 - Scale invariance and universality in economic phenomena. 68.66.224.23.

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