Wednesday, March 17, 2010

Large And Small Financial Bubbles Are Similar

Statistically speaking, size doesn’t matter when a financial bubble bursts.

The big crashes may hurt a lot more, but new analyses of “microbubbles” presented March 15 at a meeting of the American Physical Society find that the same mathematical laws underlying massive economic crises are also at work in tiny fluctuations that occur on the order of milliseconds.

The new understanding of economic fluctuations both big and small doesn’t predict when the next economic meltdown will wreak havoc on retirement accounts, said study coauthor H. Eugene Stanley of Boston University. But the results help describe complex financial fluctuations and reinforce the idea that governments ought to have a contingency plan in place for the calamitous collapses that his research describes as inevitable, Stanley said.
From "Big or small, financial bubbles burst alike: Even when they inflate and collapse in milliseconds, the same rules" apply By Laura Sanders in ScienceNews.

1 comment :

  1. It is an amazing post.Very useful to me.I liked it .Take a look to my blog cash on credit card in chennai at low interest.