Market earth quakes, a sign of emergent chaos

Regarding an article in the NY Times, A Richter Scale for Markets and to Dirk Helbing’s letter to Soros on the new physics exploring the great disruptive events our economies so frequently produce.

To Xavier Gabaix, w/ H. Eugene Stanley – authors of the study referred to: A theory of power-law distributions in Financial market


Xavier & Eugene,

The term you use is “econophysics” but the graph in “A Richter Scale for Markets” in the NY Times seems to display much more than you mention.   It shows the swelling and decaying disturbances in the economy, where theoretically they are not supposed to be. I use a physics based data mining tool to expose emerging systems of that kind.  One example I found shows market pricing mechanisms dramatically “fishtailing” an going out of control, for example.  It might be useful to you. Continue reading Market earth quakes, a sign of emergent chaos