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Stock market - The econophysics approach

  • S. Prabakaran

Research output: Contribution to journalArticlepeer-review

Abstract

In the past decade or so, physicists have begun to do academic research in economics. Perhaps people are now actively involved in an emerging field often called Econophysics. Econophysics applies statistical physics methods to economical, financial, and social problems. In this work, we attempt to introduce an Econophysics approach to general stock index of stock market. The main goal of this study is fourfold: (1) First we begin our approach through the relation between the stock price and thermodynamics by using of simple volatility model. (2) Next here we introduce the Newton's law of cooling by using of energy transformation in the economic system. (3) Then we extend the economic energy transformation in the stock markets. (4) Finally, we construct the stock markets related to the thermodynamics with using of newton's law of cooling. And this paper end with conclusion.

Original languageEnglish
Pages (from-to)857-866
Number of pages10
JournalInternational Journal of Applied Business and Economic Research
Volume12
Issue number3
StatePublished - 2014
Externally publishedYes

Keywords

  • Econophysics
  • Newton's law of cooling
  • Stock market
  • Thermodynamics

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