Wednesday, June 10, 2009

Punctuated Equilibrium and Economic Disasters?

During a long and lengthy conversation a few years back with brilliant colleague Mr. Franz Dill, we delved into examples of the replication of the theory of Punctuated Equilibrium in commerce and trade, see details on the theory here. For example, why does a soap suddenly stop selling completely in a certain region while two double in volume?

The McKinsey Quarterly just published an article - "‘Power curves’: What natural and economic disasters have in common - Parallels between the failures of man-made systems, such as the economy, and of similarly complex natural ones offer fascinating food for thought" documenting the pattern discovering aptitude of humans to map the above through statistical analysis. See complete article here.

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