Chaos Scientist Finds Hidden Financial Risks That Regulators Miss

Today, in a more bucolic setting—the Institute for New Economic Thinking at the Oxford Martin School—Farmer is drawing on decades of complexity research that began with roulette. After winning acclaim as a pioneer of chaos theory, which helps explain the unpredictability of complex systems such as the weather, he jumped into markets, co-founding one of the early quantitative investment firms in the 1990s. Now, Farmer and a band of central bank researchers are focusing on the tangled web of global finance, using a tool of the natural sciences called agent-based models to find dangers lurking in the system and uncover ways to avoid them.