on 11 November 2002
After searching some books offering an introduction to chaos theory and its possibilities for economics, I'm happy to say I have found it.
This book is a brilliant introduction for people tired of established, well respected economic theory that fails to catch up reality in 99% of the cases.
The reader will find a nice book to enter a very good explanation on how the economy really behaves, not worrying too much about maths. But this does not mean ideas are fussy or indetermined.
Nevertheless, bibliography is too short for those who want to go further into the issue of chaos applied to economics, and it still will require some more development to become a real full size general theory.
on 11 November 2002
I had been thinking about how modern mathematics should be applied to solve old economic problems. This book offers the reader a quick glance on why has conventional economic theory failed to describe and predict reality.
For a long time we have been taught, as economists, about wonderful mathematical complex systems that were not worth a penny, sometimes wondering what a doctor or an arquitect would feel if they had to learn by heart middle ages ideas on medicine or arquitecture, for heart surgery or building up the petronas towers. Like mister Ormerord says, using 19th century tools to solve 21st century problems.
This book is quite an intelectual challenge for all of us who do not take established economic thought as sacred and do not think that when reality and theorical predictions differ, reality is to be blamed for it.
It points loads of interesting questions, advancing the framework for a new general theory.
However, I miss a wider bibliography to go deeper in the issue. it would have contributed more to create a general theory if its ideas had been better organized.
It is a brilliant introduction to people who are seeking for an introduction on chaos applied to economics, setting aside mathematics.
on 15 October 2003
When confronted with a choice ants have a strategy where they switch between 3 tactics randomly.
Generalising this to humans, explains speculative bubbles in financial markets and why films can be greatly different in their level of success.
The success can start randomly, then others imitate behaviour.
on 23 April 1999
Describing nonlinear / nonequilibrium effects in economics is not easy but Ormerod has made the best expose to date. His prose is concise and clear and his case compelling. You know someone is really good when they make it look this easy. I know because I have recently written a book (Nonlinear Pricing, Wiley, 1999) on a related topic.
Butterfly Economics is a must read for those who seek to prosper in the 21st century. Ignore Ormerod's information age thinking at your own peril.