Making Sense of Chaos: A Revolution in Economic Theory | J. Doyne Farmer

Hidden Forces

Demetri Kofinas

Government, Business

4.8 • 1.6K Ratings

🗓️ 5 August 2024

⏱️ 50 minutes

🔗️ Recording | iTunes | RSS

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Summary

In Episode 374 of Hidden Forces, Demetri Kofinas speaks with J. Doyne Farmer. Dr. Farmer is a complex systems scientist and entrepreneur who pioneered many of the theories and applications that we discuss today, including chaos theory, complexity science, artificial life, and wearable computing.

We live in an age of increasing complexity, accelerating technological change, and global connectivity that holds more promise and peril than arguably any time in human history. Successfully navigating these changes will depend immeasurably on the quality of our economic models because, at their heart, all these changes—the changes associated with trends in automation, digitization, demographics, and financial markets—are rooted in the economy and the network of systems that keep us alive.

For the first time, using big data and ever-more-powerful computers, we are now able to apply complexity science to economic activity, building realistic models of the global economy and financial markets that promise to vastly outperform in terms of verisimilitude and predictive power anything that we have seen in human history.

This episode is divided into two parts. The first hour is meant to provide you with a foundational understanding of complexity science and its application to economics. We discuss chaos and volatility and compare the explanatory and predictive power of agent-based simulations to the standard economic model.

The second hour is an exploration of economic frameworks that treat the economy as an ecological network and series of metabolic processes. We also apply the lessons of the first hour to specific economic and financial questions related to investment styles, risk management, technological disruption, and policymaking.

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Episode Recorded on 08/02/2024

Transcript

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0:00.0	What's up everybody? My name is Demetri Kofinas and you're listening to Hidden Forces, a
0:06.1	podcast that inspires investors, entrepreneurs and everyday citizens to challenge consensus narratives and learn how to think
0:14.8	critically about the systems of power shaping our world. My guest of this
0:19.5	episode of Hidden Forces is Jay Doan Farmer.
0:22.7	Dr. Farmer is a complex system scientist,
0:25.2	an entrepreneur who pioneered many of the theories
0:28.1	and applications that we discussed today,
0:30.5	including Chaos Theory, Complexity Science, Artificial Life, and Wearable Computing.
0:36.7	We live in an age of increasing complexity.
0:39.4	You've heard a thousand times.
0:41.2	It's an age of accelerating technological change and global connectivity and it holds more promise and peril than arguably any time in human history.
0:50.0	Successfully navigating these changes will depend immeasurably on the quality of our economic models.
0:56.0	Because at their heart, all these changes, the changes associated with transit automation, digitization, demographics, and financial markets are rooted in the economy and the networks
1:06.2	of systems and organizations that keep us alive.
1:10.0	For the first time, using big data and ever more powerful computers, we are now able to apply
1:15.2	complexity science to economic activity, building realistic models of the global economy and
1:20.7	financial markets that promise to vastly outperform in terms of very similitude. and Today's conversation is broken into two parts.
1:33.5	The first hour is meant to provide you with a foundational understanding of complexity
1:38.1	science and its application to the world of economics.
1:41.9	We discuss chaos and volatility and compare the explanatory
1:45.3	and predictive power of agent-based simulations to the standard economic model.
1:49.8	The second hour is an exploration of economic frameworks that treat the economy as an ecological
	...

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