A Current Perspective on the Relationship between Economics and Physics

Abstract

If we recognize that the foundations of modern economics were laid by Adam Smith's famous work "Wealth of Nations", we see that economics has interacted with other disciplines for almost two and a half centuries. Among these disciplines, the place of physics is undoubtedly several steps ahead of others. In the course of this interaction, economic theory was also influenced by paradigm shifts in physics and developed in a continuous evolution. By the end of the twentieth century, the concept of econophysics appeared, as statistical physics was mainly used by various scientists to understand economic phenomena. This article discusses the relationship between econophysics and the field of economics, especially financial economics. Why econophysics is seen as a different discipline is explained based on the working methods and assumptions of both scientists.