23 Jul 2009

"I sell insurance, what do you do, Benoit?" "Oh I discovered fractals."

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Von Pepe sent me this fascinating video that I just had to stop. (I can’t spend an hour at the office watching it right now, and if I go for 10 minutes I won’t have the willpower to turn it off.) In fact, it looks like this MIT video series has a bunch of really interesting lectures.

I had read Mandelbrot’s The (Mis)Behavior of Markets when making the jump from academia to the financial sector, and it was amazing. Also, if you are curious about chaos theory but don’t know where to start, James Gleick’s book is awesome. (Fractals and chaos theory aren’t the same thing, but Gleick discusses Mandlebrot’s connection to finance.)

Now don’t get all tribal on me, Austrian purists. I’m not saying Mandelbrot’s “non-Gaussian” models of the stock market are right. Rather, I’m taking Rothbard’s approach when he argued that the chaos theorists are showing just how baseless the neoclassical economists are when they try to play the “we’re real scientists” card on Austrians.

EXTRA CREDIT: What’s the special connection between the blog Free Advice and the work of Benoit Mandelbrot?

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