Abstract
The ongoing financial crises since 2007 painfully reminded us that systems can develop what scientists often refer to as “emergent” dynamics that are fundamentally different to what can be expected by studying their parts. The assumption that the economy as a whole can be understood by solely focusing on the equilibria resulting from utility optimization of its economic agents constitutes one of the major shortcomings of economics. A mantra in academic circles, exploited by bankers and policy makers to excuse their failures, is that, with the rise of recent technological and financial innovations, societal and economic networks have never been more complex and this complexity has reached unmanageable levels within the current understanding and methodologies.
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Sornette, D., von der Becke, S. (2012). Financial Market and Systemic Risks. In: Sornette, D., Ivliev, S., Woodard, H. (eds) Market Risk and Financial Markets Modeling. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-27931-7_1
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DOI: https://doi.org/10.1007/978-3-642-27931-7_1
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