Physics of Risk is becoming more and more popular and gaining more attention from the media. This time our permanent contributor Aleksejus Kononovicius gave an interview to a journalist Marija Rudzevičiūtė from Bzn start. The original article was published in Lithuanian language, but here you can find its free form translation to English.

"Probably most of us were stuck in a traffic jam for at least once in our life. Some of us were certainly stuck in a traffic jam, though there were no car crash, no road works or no other apparent reason for the road to be jammed. Yet all cars move in a jerky motion - they suddenly accelerate, move a bit and then suddenly stop. The reason lies in a small errors made by the drivers themselves", everyday situation in a large city is reviewed by Aleksejus Kononovicius, younger research fellow at Institute of Theoretical Physics and Astronomy, Vilnius University. He is also a current contributor to the "Physics of Risk", a website which presents an idea that "more physics - less risk" for a broader society.

Another idea, which may be used to improve kinetic exchange models, might be the introduction of the many particle interactions. In the ideal gasses these interactions do not occur, but in the social systems they might have interesting consequences. Namely they might be used to explain why certain voting events (elections, referendums) yield unpredictable results.

Originally I have written this article back in the end of 2013 and submitted it to a pop-science article contest organized by three locally well-known pop-science blogs "Mokslo sriuba" (en. Science soup; online pop-science web-show), technologijos.lt (edit: currently defunct general science news portal) and konstanta.lt (en. constant; very popular blog dedicated to astronomy and astrophysics). The article was rather successful and won the scientific jury prize in the contest!

Now, after the contest has ended, I can publish this article (and its English translation) on "Physics of Risk". So I invite you to read on!

Previously we wrote about the confrontation between the socialistic and capitalistic economic thought. We have looked into it from a point of view of elementary kinetic exchange models. While in our world, in the international context, we frequently hear about it via media, which tends to use it to explain the disagreements between China and USA or Russia and USA. Clearly those countries have different economical and political models, but are they the same as media tends to present them? We invite you to listen to two talks given by scientists (posted on ted.com) - one talk is about China's economical model, while the other is about China's political model.

The idea of this contribution has come after the publication in The Economist The Big Mac index. Such index was introduce to explain the concept of real currency exchange rate needed to deal with the problem of varying price levels in different countries. The different price levels cause the different purchasing powers of the same currency around the world. For example, the network of fast food restaurants around the world McDonald’s serves everywhere the same products, consider one of them - Big Mac. Having in mind the same quality of the product we do observe different prices of Big Mac around the world and so have to accept the varying prices or purchasing powers of the same currency, say USD. It was thought from the beginning that such effect must be temporal and exchange rates have to converge towards equilibrium where Big Mac prices equalize. Unfortunately, this do not happen, the different price levels around the world is very stable phenomena and statistically prices are higher in countries with higher incomes. This statistical phenomenon was called Penn effect and economists Balassa and Samuelson in 1964 independently explained it as a result of different productivities in tradable and not tradable sectors of the economy. The research in contemporary international macroeconomics forces us to acknowledge that this phenomenon is much more general and Balassa Samuelson effect is only one of all possible explanations.