Wednesday, June 10, 2009

What natural and economic disasters have in common?

The title seems to be very interesting....isn't it?

The parallels between financial crises and natural disasters—such as earthquakes or forest fires—suggest that the economy, just like complex natural systems, is inherently unstable and prone to occasional huge failures that are very hard or impossible to foresee. Scientists and other proponents of this school of thinking are bringing new ideas grounded in complexity theory to economic forecasting, strategic planning, and risk management. This trend may have profound implications for policy makers, economists, and corporate strategists alike. Please read this article published recently in Mckinsey quarterly.

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