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Making Sense of Chaos with Doyne Farmer
Podcast

Making Sense of Chaos with Doyne Farmer



Editorial Rating

9

Qualities

  • Analytical
  • Eye Opening
  • Insider's Take

Recommendation

Traditional economic theory tends to function adequately under fairly simple scenarios. However, as complexity in a system increases, the efficacy of conventional models deteriorates. In a recent Boston Consulting Group-Henderson Institute podcast, moderator Martin Reeves interviews Doyne Farmer, a leader in complex systems who brings a new perspective to economics. According to Farmer, Complex Systems Thinking — and in particular Agent-Based Modeling — provide far more accurate forecasting and analytics. Economists, business owners, and investors interested in a rigorous examination of emerging economic reasoning will find this a robust analysis.

Take-Aways

  • A new paradigm, Complex Systems Thinking, is replacing conventional economic models in assessing complicated situations.
  • Traditional economic models failed to predict the magnitude of the 2008 global financial crisis.
  • Agent-Based Modeling provides an alternative economic tool that relies on a data cycle to assess how stakeholder decisions affect the overall economy.

About the Podcast

Doyne Farmer is a complex systems scientist at the University of Oxford and the Santa Fe Institute. Martin Reeves is chair of the BCG Henderson Institute.


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