Economics & Ecology:: the lessons of complex systems


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.

Get "fit for randomness" [with Ontonix UK]

The following extract is taken from a thought-provoking article from McKinsey. Power curves are much loved by authors, such as Clay Shirky, Seth Godin, Charles Leadbetter to illustrate the potential for conversation, collaboration and innovation, through adoption of: web 2.0; social media; crowdsourcing; collective intelligence, etc.
They are, therefore, very much “in vogue” and, I suspect, will continue to be so for some time to come…probably not a great surprise that economic theory is enjoying a renaissance in difficult times!
However, from the perspective of “financial regulation” in UK, it is difficult to believe that, if FSA chose to IGNORE the warning signs [generated by financial modelling] about Northern Rock and HBOS, they would be any more effective by monitoring “the system”!!!
“Make the system the unit of analysis. You can’t assess the behaviour and performance of a specific agent—for example, a financial-services company—without gauging the behaviour and performance of the system in which it…

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When Will the Euro Collapse? Around Q3 2013


This blog, from our Corporate website, reinforces what we are gradually accepting (I think!?) but puts a timeline on it. However, the most important aspect is the ability that Ontonix deliver, to measure complexity and robustness to such an extent. This is not some overpriced, part quantitative part qualitative, “opinion” but a 100%, objective, quantitative analysis of Publicly available macro-economic data. the full article is here.

Exactly one year ago we published a blog warning that the Structural Resilience of the EU economy had decreased from “Low” to “Very Low”, reaching dangerous levels, at which contagion becomes very likely. In that blog the situation was depicted as in the figure below: Read more of this post