Complexity Digest 2009.17 - 01.01

2009/08/14

Editor-in-Chief: Carlos Gershenson
Founding Editor: Gottfried Mayer

Economics: Meltdown modelling, Nature Bookmark and Share

Excerpt: Financial regulators do not have the tools they need to predict and prevent meltdowns, says physicist-turned-sociologist Dirk Helbing (...) They can do a good job of tracking an economy using the statistical measures of standard econometrics, as long as the influences on the economy are independent of each other, and the past remains a reliable guide to the future. But the recent financial collapse was a 'systemic' meltdown, in which intertwined breakdowns in housing, banking and many other sectors conspired to destabilize the system as a whole.