![]() What will happen if we develop a computer program that forecasts with 100 per cent accuracy the price of oil tomorrow? The price of oil will immediately react to the forecast, which would consequently fail to materialise. Markets, for example, are a level two chaotic system. ![]() ![]() Level two chaos is chaos that reacts to predictions about it, and therefore can never be predicted accurately. ![]() Though it is influenced by myriad factors, we can build computer models that take more and more of them into consideration, and produce better and better weather forecasts. The weather, for example, is a level one chaotic system. Level one chaos is chaos that does not react to predictions about it. Not only that, but history is what is called a ‘level two’ chaotic system. So many forces are at work and their interactions are so complex that extremely small variations in the strength of the forces and the way they interact produce huge differences in outcomes. ![]() History cannot be explained deterministically and it cannot be predicted because it is chaotic. ![]()
0 Comments
Leave a Reply. |