Photo by Nick Benjaminsz
QUOTES
D.G.
Champernowne & F.A. Cowell
Expertise in other branches of economic study is of limited assistance in
studying economic inequality and income distribution.
Lester C. Thurow
Under the random-walk model, the wealthy are not wealthy because of their
productive contribution is higher than others, but because they are luckier
than others.
Fred Schwed Jr
I know that there is more skill to stock speculation [than to coin flipping].
What I have never been able to determine is … how much more?
Warren E. Buffett
Benjamin Graham's disciples have used Graham's value investing approach to
realize phenomenal success in the stock market.
J.
Aitchison & J.A.C. Brown
In economic data skew frequency curves are the rule rather than the exception.
Thomas Jefferson
I believe that banking institutions are more dangerous to our liberties
than standing armies.
ARTICLES
Entrepreneurs, Chance, and the Deterministic Concentration of Wealth
by Joseph E. Fargione et al
Chance alone, combined with the deterministic effects of compounding
returns, can lead to unlimited concentration of wealth, such that the
percentage of all wealth owned by a few entrepreneurs eventually approaches
100%.
Revealed – the capitalist network that runs the world
by Andy Coghlan and Debora MacKenzie
An analysis of the relationships between 43,000 transnational corporations
has identified a relatively small group of companies, mainly banks, with
disproportionate power over the global economy.
The network of global corporate control
by Stefania Vitali et al
The first investigation of the architecture of the international ownership
network, along with the computation of the control held by each global
player.
Uncertainty, Evolution and Economic Theory
by Armen A. Alchian
A modification of economic analysis to incorporate incomplete information
and uncertain foresight. The approach embodies the principles of biological
evolution and natural selection.
BOOKS
Modeling Bounded Rationality
by Ariel Rubinstein
Usually, economic models do not spell out
the procedures by which decisions of the economic units are made; here,
we are interested in models in which procedural aspects of decision
making are explicitly included. (full text pdf)
An Assessment of the Small Business Innovation Research Program at the
Department of Defense
by the Committee for Capitalizing on Science, Technology, and Innovation
At the request of the U.S. Congress, the National Academies conducted a
comprehensive study of how the SBIR program has stimulated technological
innovation and used small businesses to meet federal research and development
needs.
Rising
Above the Gathering Storm: Energizing and Employing America for
a Brighter Economic Future
This (US) congressionally requested report by a pre-eminent committee makes four
recommendations along with 20 implementation actions that federal policy-makers
should take to create high-quality jobs and focus new science and technology
efforts on meeting the nation's needs, especially in the area of clean, affordable
energy. (full text online)
Rising
Above the Gathering Storm Two Years Later: Accelerating Progress
Toward a Brighter Economic Future. Summary of a Convocation (2009)
On April 29, 2008, about 500 representatives of business, government,
and academia met in Washington, D.C., to review the efforts taken to
achieve the goals laid out in Rising Above the Gathering Storm. (full
text online)
Rising
Above the Gathering Storm, Revisited: Rapidly Approaching Category
5
In the face of so many daunting near-term challenges, U.S. government
and industry are letting the crucial strategic issues of U.S. competitiveness
slip below the surface. (full text online)
ARTICLES
Econophysics
Does an Iron Law of Inequality exist?
The predictive power of zero intelligence in financial markets
by J. Doyne Farmer et al
Recognizing limitations in human cognition, economists have increasingly
explored models in which agents have bounded rationality. We take this
direction even further here by testing a model of trading in financial
markets that drops agent rationality almost altogether.
Technical Considerations
in the Stock Market: Fibonacci Number
Time after time, corrective or countertrend rallies do not end at indiscriminate
points, but at spectacular ratios that are found everywhere in nature. (pdf)
Gas Laws and Wealth Laws
by Frank W. Preston
It is not always wise to try to change the laws of nature. Success does
not usually attend such attempts, and if success is only to be expected
when all life has ceased and nothing moves any longer in the economic
system, we should hardly welcome the success.
Economic inequality: Is it natural?
by Arnab Chatterjee et al
Socio-economic inequalities seem to be a persistent fact of life ever
since civilization began. Can it be that they only reflect a simple
natural law, understandable from the application of physics?
Universal patterns of inequality
by Anand Banerjee and Victor M Yakovenko
Probability distributions of money, income and energy consumption per capita
are studied for ensembles of economic agents. (Full text online)
Predicting economic market crises using measures of collective panic
by D. Harmon et al
The recent economic crisis and earlier large single-day panics were preceded
by extended periods of high levels of market mimicry. (abstract and press
release)
A model of income distribution
by D. G. Champernowne
Under fairly general conditions, the Pareto curve of the equilibrium distribution
will be asymptotic to a straight line.
Chance favors the concentration of wealth, U of M study shows
Three University of Minnesota researchers have built a simplified model
that isolates the effects of chance and found that it consistently pushes
wealth into the hands of a few, ever-richer people. (pdf)
VIDEOS
IFA.com - Probability Machine, Galton Board, Randomness and Fair Price
Simulator, Quincunx
IndexFundsAdvisors video demonstrates the Normal Distribution as a model
for fund returns over time. See also Francis
Galton's Probability Machine.
Milton Friedman on capitalism
"The world runs on individuals pursuing their separate interests."
ILLUSTRATIONS
Probability Machines
Image gallery posted by Index Funds Advisors
Pictures and diagrams related to probability, the Normal Curve, and Francis
Galton.
SUMMARIES
Econophysics
of Wealth Distributions,
ed. Arnab Chatterjee et al
With the availability of accurate data, several robust features
of the income distribution have been established.
The
Wealth Inequality Reader,
The authors completely miss the stochastics determinants of wealth inequality.
LINKS
Center for Complexity in Business
The world’s first (and only) research center specializing in the application
of complex systems methods to business problems. Related links
