In "The (unfortunate) complexity of the economy" (April pp28-32) Jean-Philippe Bouchaud presents clear evidence that traditional assumptions of rational markets have to be abandoned. The old investor slogan "buy on promise, sell on rumour" quickly magnifies a downturn into a crisis, which triggers two questions. If physicsbased models are applied (beyond understanding and prediction) to actual market decisions, does this make the economy more or less stable? And, is this cause for stronger regulation?
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