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Mixing physics, economics to gauge risk

Today’s models called faulty for rare crises

By Carolyn Y. Johnson

 |  Globe Staff  

  October 31, 2011

Over the past two decades, Boston University physicist H. Eugene Stanley has been a key architect of the field of econophysics, which leverages tools more commonly deployed to examine how matter behaves at the smallest scales analyze the economy. In the latest work, published last week in the Proceedings of the National Academy of Sciences, he and collaborators tackle the problem of credit ratings, proposing a better model for predicting how likely big fluctuations are.

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