George G. Kaufman and Kenneth E. Scott provide one of the most often cited definitions of systemic risk as “the risk or probability of breakdowns in an entire system, as opposed to breakdowns in individual parts or components, and is evidenced by co-movements (correlations) among most or all parts” (p. 371). They explain how systemic […]
What Is Systemic Risk, and Do Bank Regulators Retard or Contribute to It? Read More »
C. S. Holling argues that ecosystems, economies, and societies periodically undergo four stages of an adaptive cycle in which their levels of resilience, connectivity, and wealth (or “potential”) vary in characteristic ways. Over time, a system gets locked-in to a particular way of operating in which it accumulates immense wealth, expands connectivity to maximize efficiency,
Understanding the Complexity of Economic, Ecological, and Social Systems Read More »
After explaining the shortcomings of other accounts of societal collapses, Joseph Tainter presents his own, universal theory. Societies, he argues, are problem solving organizations that solve an unending stream of problems by increasing their complexity. Each addition of complexity, however, has an energetic costs to create and maintain it. Because societies solve their easiest problems
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