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Market Crashes as Critical Phenomena? Explanation, Idealization, and Universality in Econophysics

Jhun, Jennifer and Palacios, Patricia and Weatherall, James Owen (2017) Market Crashes as Critical Phenomena? Explanation, Idealization, and Universality in Econophysics. [Preprint]

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Abstract

We study the Johansen-Ledoit-Sornette (JLS) model of financial market crashes (Johansen, Ledoit, and Sornette [2000,]. "Crashes as Critical Points." Int. J. Theor. Appl. Finan 3(2) 219-255). On our view, the JLS model is a curious case from the perspective of the recent philosophy of science literature, as it is naturally construed as a “minimal model” in the sense of Batterman and Rice (Batterman and Rice [2014] “Minimal Model Explanations.” Phil. Sci. 81(3): 349–376. ) that nonetheless provides a causal explanation of market crashes, in the sense of Woodward’s interventionist account of causation (Woodward [2003]. Making Things Happen. Oxford: Oxford University Press).


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Item Type: Preprint
Creators:
CreatorsEmailORCID
Jhun, Jenniferjhun@lakeforest.edu
Palacios, PatriciaPatricia.palacios@lrz.uni-muenchen.de
Weatherall, James Owenweatherj@uci.edu0000-0003-1461-7821
Keywords: Johansen-Ledoit-Sornette Model; Econophysics; Renormalization group; Minimal Models; Explanation; Universality; Infinite Idealization
Subjects: General Issues > Causation
Specific Sciences > Economics
General Issues > Explanation
General Issues > Models and Idealization
Specific Sciences > Physics
Specific Sciences > Physics > Statistical Mechanics/Thermodynamics
Depositing User: James Owen Weatherall
Date Deposited: 08 Apr 2017 13:24
Last Modified: 08 Apr 2017 13:24
Item ID: 12976
Subjects: General Issues > Causation
Specific Sciences > Economics
General Issues > Explanation
General Issues > Models and Idealization
Specific Sciences > Physics
Specific Sciences > Physics > Statistical Mechanics/Thermodynamics
Date: 2017
URI: http://philsci-archive.pitt.edu/id/eprint/12976

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