Showing posts with the label Chaos Theory

The Economic Theory of Chaos: Controlling the Uncontrollable

Chaos is a natural part of our lives and is prevalent in anything from weather patterns to economics. In order to understand the unpredictable nature of life and fluctuations in normal development through time Chaos Theory came into being. " Discoveries in quantum physics, biology, and chaos theory enable us to deal successfully with change and uncertainty in our organizations and our lives....the new science radically alters our understanding of the world, and it can teach us to live and work well together in these chaotic times " (Wheatley, 2009). Originally used in weather patterns and physics the theory has been applied to understanding and minimizing economic crisis. Before understanding the theory it is important to first have a grasp of the field of economics. " Economics, if it is to be a science at all, must be a mathematical science … mechanics of utility and self-interest "(Jevons, 1924). The very purpose of economic models is to predict, explain a