Photo by Nick Benjaminsz


D.G. Champernowne & F.A. Cowell
Expertise in other branches of economic study is of limited assistance in studying economic inequality and income distribution.

Lester C. Thurow
Under the random-walk model, the wealthy are not wealthy because of their productive contribution is higher than others, but because they are luckier than others.

Fred Schwed Jr
I know that there is more skill to stock speculation [than to coin flipping]. What I have never been able to determine is … how much more?

Warren E. Buffett
Benjamin Graham's disciples have used Graham's value investing approach to realize phenomenal success in the stock market.

J. Aitchison & J.A.C. Brown
In economic data skew frequency curves are the rule rather than the exception.

Thomas Jefferson
I believe that banking institutions are more dangerous to our liberties than standing armies.


Entrepreneurs, Chance, and the Deterministic Concentration of Wealth
by Joseph E. Fargione et al

Chance alone, combined with the deterministic effects of compounding returns, can lead to unlimited concentration of wealth, such that the percentage of all wealth owned by a few entrepreneurs eventually approaches 100%.

Revealed – the capitalist network that runs the world
by Andy Coghlan and Debora MacKenzie

An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

The network of global corporate control
by Stefania Vitali et al

The first investigation of the architecture of the international ownership network, along with the computation of the control held by each global player.

Uncertainty, Evolution and Economic Theory
by Armen A. Alchian

A modification of economic analysis to incorporate incomplete information and uncertain foresight. The approach embodies the principles of biological evolution and natural selection.


Modeling Bounded Rationality
by Ariel Rubinstein

Usually, economic models do not spell out the procedures by which decisions of the economic units are made; here, we are interested in models in which procedural aspects of decision making are explicitly included. (full text pdf)

An Assessment of the Small Business Innovation Research Program at the Department of Defense
by the Committee for Capitalizing on Science, Technology, and Innovation

At the request of the U.S. Congress, the National Academies conducted a comprehensive study of how the SBIR program has stimulated technological innovation and used small businesses to meet federal research and development needs.

Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future
This (US) congressionally requested report by a pre-eminent committee makes four recommendations along with 20 implementation actions that federal policy-makers should take to create high-quality jobs and focus new science and technology efforts on meeting the nation's needs, especially in the area of clean, affordable energy. (full text online)

Rising Above the Gathering Storm Two Years Later: Accelerating Progress Toward a Brighter Economic Future. Summary of a Convocation (2009)
On April 29, 2008, about 500 representatives of business, government, and academia met in Washington, D.C., to review the efforts taken to achieve the goals laid out in Rising Above the Gathering Storm. (full text online)

Rising Above the Gathering Storm, Revisited: Rapidly Approaching Category 5
In the face of so many daunting near-term challenges, U.S. government and industry are letting the crucial strategic issues of U.S. competitiveness slip below the surface. (full text online)


Does an Iron Law of Inequality exist?

The predictive power of zero intelligence in financial markets
by J. Doyne Farmer et al

Recognizing limitations in human cognition, economists have increasingly explored models in which agents have bounded rationality. We take this direction even further here by testing a model of trading in financial markets that drops agent rationality almost altogether.

Technical Considerations in the Stock Market: Fibonacci Number
Time after time, corrective or countertrend rallies do not end at indiscriminate points, but at spectacular ratios that are found everywhere in nature. (pdf)

Gas Laws and Wealth Laws
by Frank W. Preston

It is not always wise to try to change the laws of nature. Success does not usually attend such attempts, and if success is only to be expected when all life has ceased and nothing moves any longer in the economic system, we should hardly welcome the success.

Economic inequality: Is it natural?
by Arnab Chatterjee et al

Socio-economic inequalities seem to be a persistent fact of life ever since civilization began. Can it be that they only reflect a simple natural law, understandable from the application of physics?

Universal patterns of inequality
by Anand Banerjee and Victor M Yakovenko

Probability distributions of money, income and energy consumption per capita are studied for ensembles of economic agents. (Full text online)

Predicting economic market crises using measures of collective panic
by D. Harmon et al

The recent economic crisis and earlier large single-day panics were preceded by extended periods of high levels of market mimicry. (abstract and press release)

A model of income distribution
by D. G. Champernowne

Under fairly general conditions, the Pareto curve of the equilibrium distribution will be asymptotic to a straight line.

Chance favors the concentration of wealth, U of M study shows
Three University of Minnesota researchers have built a simplified model that isolates the effects of chance and found that it consistently pushes wealth into the hands of a few, ever-richer people. (pdf)

VIDEOS - Probability Machine, Galton Board, Randomness and Fair Price Simulator, Quincunx
IndexFundsAdvisors video demonstrates the Normal Distribution as a model for fund returns over time. See also Francis Galton's Probability Machine.

Milton Friedman on capitalism
"The world runs on individuals pursuing their separate interests."


Probability Machines
Image gallery posted by Index Funds Advisors

Pictures and diagrams related to probability, the Normal Curve, and Francis Galton.


Econophysics of Wealth Distributions,
ed. Arnab Chatterjee et al

With the availability of accurate data, several robust features of the income distribution have been established.

The Wealth Inequality Reader,
The authors completely miss the stochastics determinants of wealth inequality.


Center for Complexity in Business
The world’s first (and only) research center specializing in the application of complex systems methods to business problems. Related links