Debating the role of econophysics

Research in econophysics has been going on for more than a decade with considerable publicity in some of the leading general science journals. Strong claims have been made by some advocates regarding its reputed superiority to economics, with arguments that in fact the teaching of microeconomics and macroeconomics as they are currently constituted should cease and be replaced by appropriate courses in mathematics, physics, and some other harder sciences. The lack of invariance principles in economics and the failure of economists to deal properly with certain empirical regularities are held against it in this line of argument. Responding arguments address four points: (a) that many econophysicists lack awareness of what has been done in economics and thus sometimes claim a greater degree of originality and innovativeness in their work than is deserved, (b) that econophysicists do not use as sufficiently rigorous or sophisticated statistical methodology as econometricians, (c) that econophysicists search for universal empirical regularities in economics that probably do not exist, and (d) that the theoretical models they adduce to explain empirical phenomena have many difficulties and limits. This article examines the arguments and concludes that nonlinear dynamics and entropy concepts may provide a productive way forward.