Complex Insight - Understanding our world
10.6K views | +1 today
Follow
Complex Insight  - Understanding our world
Latest news on complex systems in life sciences, engineering, education and government
Curated by ComplexInsight
Your new post is loading...
Your new post is loading...
Scooped by ComplexInsight
Scoop.it!

Complexity and the madness of crowds – lessons from disaster prevention

Complexity and the madness of crowds – lessons from disaster prevention | Complex Insight  - Understanding our world | Scoop.it

Recent debates about the crisis vulnerability of international financial networks indicate that in economics complexity is still a widely misunderstood concept. Great post on comparing financial trading with the behaviour of crowds. Worth reading - click on image or title for more info.

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Why teaching economics must now change in light of the crisis | vox

Why teaching economics must now change in light of the crisis | vox | Complex Insight  - Understanding our world | Scoop.it

Diane Coyle talks to Viv Davies about her recent edited volume on 'What's the use of economics?' They discuss what economists need to bring to their jobs and the way in which education in universities could be improved to fit economic graduates better for the real world. The interview was recorded in London on 22 September 2012. Worth listening too. Click on image or title to learn more.

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Bubbles and Busts: Macroeconomics Could Benefit From Complexity

Nice over view article on why complexity (or complex systems) can help economics and the challenges that still remain before complex systems based approaches become mainstream in economics thinking. Click on title to learn more.

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

DebtRank: Too Central to Fail? Financial Networks, the FED and Systemic Risk : Scientific Reports : Nature Publishing Group

DebtRank: Too Central to Fail? Financial Networks, the FED and Systemic Risk : Scientific Reports : Nature Publishing Group | Complex Insight  - Understanding our world | Scoop.it

Financial regulators and policy makers should focus on financial institutions that are ‘too central to fail’ as well as those that are ‘too big to fail’, research published in Scientific Reports this week suggests. T. Inspired by feedback-centrality measures in networks, such as PageRank, Stefano Battiston and colleagues in the Systems Design research team at  ETH Zurich, Switzerland introduce a new measure of systemic impact, which they call DebtRank. They use DebtRank to analyze a recently released data set with information on the institutions that received aid from the US Federal Reserve Bank through its US$1.2 trillion emergency loans programmes from 2008 to 2010. The authors find that during the peak of the crisis, a group of 22 financial institutions, which received most of the loans, became more central to the network, which means that the default of each one would have a larger economic impact on the whole network. Even small, dispersed shocks to individual banks could thus have triggered the default of a large portion of the system. The authors note that because the network of impact used in the study is a proxy of the real, unknown network, the findings should be regarded with caution, but the study shows the kinds of insights that can be gained using DebtRank. Click on image or title to learn more.

more...
Smith's comment, August 10, 2012 6:20 PM
Cool finding..so it look that it is not enough to control for the big banks...also the relatively small banks can trigger a systemic default...!
ComplexInsight's comment, August 14, 2012 5:59 PM
hi S. Its related to how the different banks are interconnected in networks. There is a good article explaining how page rank and similar network feedback metric systems can be applied to ecosystems to identify key species that sustain that ecosystem. (see http://carbon-based-ghg.blogspot.fr/2009/09/modifying-googles-page-rank-algorithm.html) The same concept occurs in debt rank - size doesn't always matter - its the domino effect and dependency chains with other organizations or degree of network connectivity that impacts the ecosystem. A large or small private bank can fail - if it is relatively independent - then its simply an isolated bank. Think Bairings in the UK - its failure due to Leeson's trading didn't cause a systemic failure because it was largely an independent bank. However the Sarakin scandal in Japan in the 1970's and 80's threatened the failure of a number of international banks who were connected through loans and loan guarantees. The financial crisis of the the last decade is similar - the degree of network connectedness on subprime products and underwriting made the entire banking sector susceptible. Applying ecological modeling tools and topology tools like network analysis - can help a lot in understanding the current financial crisis.
Scooped by ComplexInsight
Scoop.it!

Phys. Rev. E 85, 065201 (2012): Detecting hidden nodes in complex networks from time series

Phys. Rev. E 85, 065201 (2012): Detecting hidden nodes in complex networks from time series | Complex Insight  - Understanding our world | Scoop.it

Unfortunately you will need an account to access this. Excellent paper from Arizona state and Center of Complexity Research at Beijing Normal University. The research provides a general method to detect hidden nodes in complex networks, using only time series from nodes that are accessible to external observation.  This is important for a bunch of research and analysis areas that are looking at complex systems with time series data and trying to determine hidden actors/processes or patterns in black boxed systems/subsystems with network connections. The detailed method is based on compressive sensing and encompasses continuous- and discrete-time and the evolutionary-game type of dynamical systems as well.  The practical demonstration of the technique is done using analysis of a social network.  Worth taking a look at. To learn more click on title of article. 

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Big Data’s Parallel Universe Brings Fears, and a Thrill

Big Data’s Parallel Universe Brings Fears, and a Thrill | Complex Insight  - Understanding our world | Scoop.it

Dr. Farmer said classical economics had failed miserably to provide the right data for us to understand ourselves. He and others have begun to develop so-called agent-based models of the economy, asking in effect how the seemingly random behavior of individual ants can give rise to anthills with all their pulsing purpose, form and intelligence.

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

real economics: The failure of economics

"We have reduced the economics profession to a bunch of math nerds who somehow believe that by using ever more complex formulas, they can describe reality. It doesn't work like that. Yet we still follow these charlatans over the cliff because they have convinced us their complex math makes them as scientific as physicists. Maybe they should try musical notation (just kidding!!!) " - Interesting review by Jonathoan Larson  of George Soros's recent presentation of the Festical of Economics, Trento, Italy June 2, 2012. Read more...

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Microfoundations in macroeconomics

Microfoundations in macroeconomics | Complex Insight  - Understanding our world | Scoop.it

Useful set of links to  posts on microfoundations in macroeconomics and other useful models. Well worth reading to see some of the benefits and challenges of using individua and agent based models for economic applications. Learn more... 

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Amazon.com: Complexity and the History of Economic Thought (Perspectives on the History of Economic Thought) (9780415133562): David Colander: Books

Amazon.com: Complexity and the History of Economic Thought (Perspectives on the History of Economic Thought) (9780415133562): David Colander. A number of researchers, such as Brian Arthur and Buz Brock, have used complex adaptive systems and emergent complexity theories to consider issues in economics. This volume considers the complexity approach to economics from a history of thought and methodological perspectives. It finds that the ideas underlying complexity have been around for a long time, and that this new work in complexity has many precursors in the history of economic thought. Learn more...

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Mike Norman Economics: A mathematician looks at economics and is baffled by what he sees.

Mike Norman Economics: A mathematician looks at economics and is baffled by what he sees. | Complex Insight  - Understanding our world | Scoop.it

From Mike Norman's blog on current economic debate between Paul Krugman and Steve Keen : The source of all the confusion, in my view, is the idea that if you can’t measure something and model it mathematically, it has no meaning. There is too much mathematics used and expected in economics, and too much of it is of poor quality and distorts the ideas it is meant to undergird. Read more...

more...
No comment yet.
Rescooped by ComplexInsight from Social Simulation
Scoop.it!

JPMorgan and the price of complexity

JPMorgan and the price of complexity | Complex Insight  - Understanding our world | Scoop.it

Inevitably, the answer to that question depends on whether you view the financial markets as complicated or complex. If the financial markets are merely complicated, traditional approaches to regulation can be effective: regulators can turn their attention to individual actors within the market and systematically make the requisite changes to restore the market to equilibrium. In a complex system, however, traditional approaches to regulation can be woefully inadequate — small changes may end up having outsized effects, while big changes may end up having little or no effect. In a complex system, you need to focus on the interactions between each of the participants as much as the condition of individual actors.


Via Frédéric Amblard
more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

How Development Economists Can Learn from Beatles’ Paul McCartney…

WB’s chief econ Justin Lin picks lyrics from Paul McCartney’s song: In his hit My Valentine, former Beatle Sir Paul McCartney sings about a Moroccan vacation where foul weather meant h...
more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Amazon: From Crisis to Growth in Africa (Routledge Studies in Development Economics): editor Mats Lundahl, Mats Lundahl:

From Crisis to Growth in Africa: This book is concerned with the problem of  achieving sustained economic growth in thirteen African countries. 

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

J. Doyne Farmer on Agent-Based Modeling

Good interview at the Institutional Investor with J. Doyne Farmer,  an external professor at the Santa Fe Institute, a private, nonprofit research organization, but was originally trained as a physicist. In the 1980s he worked at the Los Alamos National Laboratory, home of the Manhattan Project, where scientific luminaries like J. Robert Oppenheimer and Richard Feynman once plied their trade. At Los Alamos Farmer founded the Complex Systems Group in the theoretical division. In 1991, he co-founded the Prediction Company, a quantitative trading firm which was purchased by Swiss banking giant UBS in 2005.The Santa Fe academic and Los Alamos alum says the insights of classical and behavioral finance can be much refined by using computers to simulate how real people act — and interact — when making economic decisions. Click on the title to learn more.

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

A Warning on Bank Complexity, From Someone Who Would Know

A Warning on Bank Complexity, From Someone Who Would Know | Complex Insight  - Understanding our world | Scoop.it

The interdependence and complexity of the global finanical system is is a rich area for complex systems research. So it is interesting when bank executives state who needs to own and manage the complexity of the system. Sallie L. Krawcheck, a former Bank of America and Citigroup executive, discussed her concerns about the complexity of financial behemoths at the Bloomberg Markets 50 Summit in Manhattan conference.“If you look at the job of the board, if you look at the job of investors, it’s the concern about complexity,”  When asked whether she saw evidence that banks had become too complex.

“It’s tough to generalize,” she said. “My concern is when the products themselves become too complex to understand, one begins to have a problem.” 

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Rethinking Growth § SEEDMAGAZINE.COM

Rethinking Growth § SEEDMAGAZINE.COM | Complex Insight  - Understanding our world | Scoop.it

Herman Daly applies a biophysical lens to the economy and finds that bigger isn’t necessarily better. Herman Daly is an ecological economist and co-founder and associate editor of the journal Ecological Economics. As the World Bank’s senior environmental economist from 1988 to 1994, Daly focused on Latin American poverty and development and helped to establish the discipline of ecological economics. Today, based at the School of Public Policy at the University of Maryland, Daly spoke with Seed editor Maywa Montenegro about growth, technology, happiness, and the steady-state economy. A great article worth reading and thinking about. Click on the image or the title to learn more.

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

BBC:Steve Keen Interview: Why Economics Is Bunk

BBC:Steve Keen Interview: Why Economics Is Bunk | Complex Insight  - Understanding our world | Scoop.it

Newsnight Economics Editor Paul Mason interviews the controversial economist Steve Keen before an audience at the London School of Economics (30 minutes). Keen was one of a small number of economists who predicted there would be a major financial crisis before the 2008 crash. He argues that if we keep the "parasitic banking sector" alive the economy dies, and says that conventional economics provides an unwitting cover for "the greatest ponzi schemes in history". Click on title or image to learn more.

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Jenna Burrell | Assistant Professor, School of Information, UC-Berkeley

Jenna Burrell | Assistant Professor, School of Information, UC-Berkeley | Complex Insight  - Understanding our world | Scoop.it

Jenna Burrel is a sociologist and assistant professor in the School of Information at UC-Berkeley. If you are interested in the intersection of socioeconmics, ethnography, big data and good research her blog is a must read.  Also her latest article “Technology Hype vs. Enduring Uses: A longitudinal study of Internet use among early adopters in an African city” is out this month in the wonderful open access journal First Monday. Click on the image or headline to learn more..

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Economics and Morality: Paul Krugman’s Framing.

Economics and Morality: Paul Krugman’s Framing. | Complex Insight  - Understanding our world | Scoop.it

Markets are not provided by nature. They are constructed — by laws, rules, and institutions. All of these have moral bases of one sort or another. Hence, all markets are moral, according to someone’s sense of morality. The only question is, Whose morality? In contemporary America, it is conservative versus progressive morality that governs forms of economic policy. The systems of morality behind economic policies need to be discussed. Learn more...

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Doyne Farmer: Taking Stock of Complexity Economics 1/5 | Institute for New Economic Thinking

Doyne Farmer: Taking Stock of Complexity Economics 1/5 | Institute for New Economic Thinking | Complex Insight  - Understanding our world | Scoop.it

Doyne Farmer, Professor at Santa Fe Institute speaking at the breakout panel entitled "Taking Stock of Complexity Economics: Which Problems Does It Illuminate?" at the Institute for New Economic Thinking's (INET) Paradigm Lost Conference in Berlin. April 14, 2012.  All the presentations are available and very worth watching. Learn more..

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Growing Economic Inequality 'Endangers Our Future' : NPR

Growing Economic Inequality 'Endangers Our Future' : NPR | Complex Insight  - Understanding our world | Scoop.it

In The Price of Inequality, Nobel Prize-winning economist Joseph Stiglitz argues in his new book, The Price of Inequality: How Today's Divided Society Endangers Our Future,  that widely unequal societies don't function effectively or have stable economies and that even the rich will pay a steep price if economic inequalities continue to worsen. Stiglitz chaired President Clinton's Council of Economic Advisers and became the chief economist at the World Bank so his opinions are certainly informed. NPR books has a great interview that is worth reading. Learn more...

more...
No comment yet.
Rescooped by ComplexInsight from Social Simulation
Scoop.it!

Algorithms Take Control of Wall Street

Algorithms Take Control of Wall Street | Complex Insight  - Understanding our world | Scoop.it

Wired Article scooped and summarized by Fredeeric Amblard: Last spring, Dow Jones launched a new service called Lexicon, which sends real-time financial news to professional investors. This in itself is not surprising. The company behind The Wall Street Journal and Dow Jones Newswires made its name by publishing the kind of news that moves the stock market. But many of the professional investors subscribing to Lexicon aren’t human—they’re algorithms, the lines of code that govern an increasing amount of global trading activity—and they don’t read news the way humans do. They don’t need their information delivered in the form of a story or even in sentences. They just want data—the hard, actionable information that those words represent.

Lexicon packages the news in a way that its robo-clients can understand. It scans every Dow Jones story in real time, looking for textual clues that might indicate how investors should feel about a stock. It then sends that information in machine-readable form to its algorithmic subscribers, which can parse it further, using the resulting data to inform their own investing decisions. Lexicon has helped automate the process of reading the news, drawing insight from it, and using that information to buy or sell a stock. The machines aren’t there just to crunch numbers anymore; they’re now making the decisions. Learn more...


Via Ashish Umre, Bronwen Evans, Frédéric Amblard
more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

How economists have misunderstood inequality: An interview with James Galbraith

How economists have misunderstood inequality: An interview with James Galbraith | Complex Insight  - Understanding our world | Scoop.it

The Washington Post has an interview with James Galbraith, whose new book, “Inequality and Instability,” attributes the rise in inequality since 1980 to structural changes in the world economy. One of the key findings of the new book is that there are common global patterns in economic inequality across different coutnries that appear strongly reated to major events that impact the world economy. Galbraith chases down some of the relationships and focuses on how inequality relates to macroeconomic performance and financial factors - previously inequality has often been considered a microeconomic problem. Worth reading. Learn more...

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Geospatial Networking in the Roman Empire | HISTORIES OF THINGS TO COME

Geospatial Networking in the Roman Empire | HISTORIES OF THINGS TO COME | Complex Insight  - Understanding our world | Scoop.it

At Stanford, Classics professor Walter Scheidel and digital humanities developer Elijah Meeks, with geographer/Web developer Karl Grossner and Noemi Alvarez have produced a geospatial networking system called ORBIS, which is like a Google Maps of the Roman Empire. The map allows users to explore the empire via the Romans' famous road system and sea routes, with embedded contemporary travel costs in denarii. "This application facilitates simulation of the structural properties of the network, which are of particular value for our understanding of the historical significance of cost in mediating connectivity within the Roman Empire." As we build out somulation models of economies and disease, using tools such as Robis can hep us test hypothese against well documented historical records. Interesting. Learn more...

more...
No comment yet.
Scooped by ComplexInsight
Scoop.it!

Amazon.com: Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics (9781422121030): Eric D. Beinhocker: Books

Amazon.com: Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics (9781422121030): Eric D. Beinhocker: Books | Complex Insight  - Understanding our world | Scoop.it

Amazon.com: Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics Looks at the economy as an evolving adaptive complex system. Worth reading.

more...
No comment yet.