What are the roles of phsics to the economy?(in simple terms)?

Question

What are the roles of phsics to the economy?(in simple terms)?

Answer 1

Why physics can contribute to economics?





• We can work with real market data derive empirical laws and construct phenomenological theories



• Statistical physics has useful approaches to systems, composed of many interacting parts



Drawbacks:



• Interacting units in economics are thinking agents with adaptive strategies and not “mindless” particles obeying simple microscopic laws

Answer 2

Physics should teach economists what is equilibrium. Economists have found this undigestable. They say that unseen or invisible hands bring out equilibrium. They are not bothered to learn from chemistry and physics. When hot water is mixed with cold water, heat moves from hot water to cold water and the equilibrium( equalization of temperatures or levels of heat energy) results. When a tube of a vehicle bursts, air moves out of the tube i.e. from higher density to lower density. Similarly wealth moves from higher concentration to lower concentration and this brings out equilibrium.Economists have made economics, a pure material science, a pseudo-social science. Economists should learn to study wealth the way chemists study matter.