Why are markets so volatile?
Mainstream economic thinking has considerable difficulty in explaining the massive degree of volatility of financial markets over the past few months.Both shares and bonds exhibit large fluctuations on an almost daily basis. The problem is particularly acute for the concept which is fundamental to a great deal of modern macroeconomics, based on the so-called ‘representative […]
Hard problems in economics
This is a summary of a presentation I gave in Zurich earlier in June to FuturICT,one ofthe candidate flagship European Union research projects, each worth 1 billion Euros. 1.Financial markets is a very hard problem, issues of agent heterogeneity, networks, learning, financial innovation, regulation – all these and more are important. Mainstream economics has largely […]
extreme events, hill running and financial markets
I am currently in the Scottish Highlands for ten days or so, and my outings on the hills have made me reflect on extreme events. The fact that they lie so much outside the perceptions which people have about the world makes it very hard to appreciate that they occur at all. I’ve just finished […]
