‘Power curves’: What natural and economic disasters have in common
Wednesday, 9 February, 2011 Leave a comment
An interesting extract from this McKinsey article to whet your appetite:
“…Scientists, sometimes in cooperation with economists, are taking the lead in a young field that applies complexity theory to economic research, rejecting the traditional view of the economy as a fully transparent, rational system striving toward equilibrium. The geophysics professor and earthquake authority Didier Sornette, for example, leads the Financial Crisis Observatory, in Zurich, which uses concepts and mathematical models that draw on complexity theory and statistical physics to understand financial bubbles and economic crises”.