Econophysics is a new word, used to describe work being done by physicists
in which financial and economic systems are treated as complex systems. Eve
ryone is affected by economic fluctuations, and quantifying fluctuations is
a topic that many physicists have contributed to in recent years. Moreover
, everyone - rich and poor - would be powerfully affected by a breakdown of
the world-wide financial system. Further, it is possible that methods and
concepts developed in the study of strongly fluctuation systems might yield
new results in economics. Finally, economic systems are complex interactin
g systems for which a tremendous amount of quantitative data exists, much o
f it never analyzed. Here we discuss selected recent examples where statist
ical physicists studying fluctuations have uncovered two new empirical "law
s". The first empirical law concerns the histogram giving the relative occu
rrence probability that a stock experiences a given price change; this hist
ogram decreases as the given price change increases, with an apparent power
law tail that describes fluctuations differing by as much as 8 orders of m
agnitude in this relative occurrence probability. The second empirical law
concerns a histogram of size changes of business firms, which has a width t
hat decreases as a power law of the firm size for firms that range over rou
ghly 8 orders of magnitude. In addition to such scaling laws, there appears
also the analog of "universality" - e.g., the analogous histogram of count
ry size appears to obey the same scaling law, with the same exponent, as th
e histogram of firm size. (C) 1999 Elsevier Science B.V. All rights reserve
d.