“Making Sense of Chaos” by J. Doyne Farmer

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Complexity Economics shift from “as if” models to “as is”
Models should fit the facts with plausible inputs
‘Complicated’ (many moving parts) and ‘complex’ (outputs are not easily calculated) are not synonymous
Modern economies are ecosystems
Money is a contract, contracts live on balance sheets
“What are the nodes? What are the communities?”
Only 35% of improvements come from within the industry, the rest come from the supply chain
Technology typically shifts unemployment between industries
Risks are about known events, uncertainty is about the unknown
Chaos pervades complicated systems but is rare in simple systems
Data that look chaotic can have solid, short run predictions
Games enter a static state when they are not competitive
Leverage adds volatility that lead to crashes
When pressure is applied to a fluid, it is stable. When extreme pressure is applied, turbulence occurs.

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