Universal fluctuations in growth dynamics of economic systems

Por • 11 dic, 2017 • Sección: Economía

Nathan C. Frey, Sakib Matin, H. Eugene Stanley, Michael Salinger

Work in econophysics has shown the existence of robust structures in economics data, which had been largely ignored in past economic literature. Many complex interacting systems in nature, such as earthquakes, are described by power laws. In statistical physics, fluctuations for systems near the critical point follow a power law distribution. The exponents associated with the power law for fluctuations can be used to categorize the systems into specific universality classes. In economics, growth rates for firms depend on different factors for different industries. Here, we show that fluctuations in growth for companies follow a power law with very similar scaling exponents, irrespective of the economic sector. Our findings hold for many industries across all available data. Furthermore, we show that fluctuations of the growth rate for new industries self-organize into a power law distribution over relatively short time scales. Our results provide the first strong evidence of statistical mechanical universality in economic systems, and can be used as an empirical test for theories of microeconomic growth.

arXiv:1712.02003v1 [q-fin.ST]

Statistical Finance (q-fin.ST); Physics and Society (physics.soc-ph)

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