The Evolution of Complex Systems Theory and the Advancement of Econophysics Methods in the Study of Stock Markets Crashes

Labuan Bulletin of International Business & Finance (LBIBf), Vol. 14, issue 1, Forthcoming

15 Pages Posted: 27 Dec 2016 Last revised: 2 Feb 2017

See all articles by Ho Yew Joe

Ho Yew Joe

Independent

Mario Arturo Ruiz Estrada

University of Malaya (UM) - Faculty of Economics & Administration (FEA)

Su-Fei Yap

University of Malaya - FEA

Date Written: December 27, 2016

Abstract

This paper traces the origin and development of the complex systems theory over the course of history, up to its latest advancement in the study of stock market crashes. The trail of the theory’s fuzzy evolution is expansive that covers the ground of the complexity epistemology, natural science and computer science. A meticulous review is undertaken to distinguish the complex systems theory from another seemingly overlapping theory of the chaos systems. The paper recounts how researchers from cross-disciplines, particularly from the econophysics have banded together to consolidate and diffuse the application of the complex systems theory in the economics and further discusses the methodological contribution of the econophysics in the area of stock market. To date, the complex systems theory and the methodologies from the econophysics are well-established as the frontier for studies in stock market bubbles and crashes.

Keywords: complex systems, econophysics, stock market crashes

JEL Classification: B5, G1, N2, P4

Suggested Citation

Joe, Ho Yew and Ruiz Estrada, Mario Arturo and Yap, Su-Fei, The Evolution of Complex Systems Theory and the Advancement of Econophysics Methods in the Study of Stock Markets Crashes (December 27, 2016). Labuan Bulletin of International Business & Finance (LBIBf), Vol. 14, issue 1, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2890445

Ho Yew Joe (Contact Author)

Independent ( email )

No Address Available

Mario Arturo Ruiz Estrada

University of Malaya (UM) - Faculty of Economics & Administration (FEA) ( email )

Kuala Lumpur, 50603
Malaysia
+60126850293 (Phone)

HOME PAGE: http://ssrc.um.edu.my/

Su-Fei Yap

University of Malaya - FEA ( email )

Kuala Lumpur, Wilayah Persekutuan 50603
University of Malaya (UM)
50603 Kuala Lumpur
Malaysia
60 17 342 0171 (Phone)

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