This weekend I walked into a gallery on 21st street and saw this sculpture: This photo captures the components of the system, but not the dynamics of it. Basically, you’re looking at two fans facing each other and connected by four pieces of fishing line. Around the fishing line are wrapped two circular streamers of… Continue reading Simple is the New Complex
Tag: Economics
Nudging you the Wrong Way
Behavioural Economics is all the rage these days. It recognizes that we are not fully rational and tries to to ‘nudge’ us to make positive changes in their lives (for instance, creating systems where if you get a raise it is automatically saved in a 401(k) unless you opt out). But what if you wanted… Continue reading Nudging you the Wrong Way
Boom & Bust
Way back in 1933, Irving Fisher outlined what it took to make a depression or recession really nasty. In a nutshell: too much debt, followed by deflation that is brought on by everyone selling to reduce their debt. This creates a vicious cycle where you can sell everything you have but you still can’t cover… Continue reading Boom & Bust
The Giant Pool o’ Money
I just finished listening to This American Life‘s story on The Giant Pool of Money a.k.a. how the subprime mortgage fiasco became the credit crunch. It’s a fascinating story, made all the more real by their “man on the street” interviews. I highly recommend listening to it so you can get a taste of the… Continue reading The Giant Pool o’ Money
The Depression & Path Dependence
There’s a concept in both the social and hard sciences called path dependence. To oversimplify, it basically says that everything that happens influences everything that subsequently happens – and provides positive feedback to what you are going to do. It always has an influence, even if only infinitely small. It was with this in mind… Continue reading The Depression & Path Dependence