6533b853fe1ef96bd12ac08a

RESEARCH PRODUCT

Crossing Boundaries: Why Physics Can Help Understand Economics

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Socio-economic systems can often successfully be treated as complex systems in the statistical physics sense. This means that the complexity resides in the emerging dynamical behaviour, not in a complicated composition. In order to understand why physics can help to understand socio-economic phenomena with complex behaviour in this sense, I argue that it is necessary to adopt a structural perspective. Accordingly, one has to modify the notion of mechanistic explanations, partly by broadening it. One crucial tool for finding mechanistic explanations in such a structural sense, are minimal models, i.e. models that abstract from micro details in a drastic way. I will show why mechanistic explanations using minimal models for complex dynamical behaviour naturally lead to a structural notion of mechanisms. Among other things I will deal with two diverging views. One of these is that the application of physics-based models to socio-economic phenomena is (mostly) unwarranted to begin with. The other diverging view is that, while the use is in fact warranted, the resulting explanation of socio-economic phenomena is either non-causal or, if causal, not in a mechanistic sense.