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6 of 6 people found the following review helpful
4.0 out of 5 stars Well written description of the new economics
Mark Buchanan is a physicist turned economics writer. This book explains the ways in which macro economics has been hiding its head in the sand. The fundamental promise of current macro-economics is that the economy is explained by states of equilibrium. A standard example is prices. If the price of an item is too low, it will be more attractive to more people, who will...
Published 18 months ago by Russ Abbott

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51 of 63 people found the following review helpful
2.0 out of 5 stars A science journalist decides to write about the economy
Here we go again: The author argues that economics has not understand positive feedback mechanism (Fine!). Then a couple of chapters of overview of economics; basically the standard critique of neoclassical economics (Again?). The bulk of the book talks about complexity, weather phenomena, and several books that the author has read (Okay, but please show me the meat!). We...
Published 20 months ago by Jackal


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51 of 63 people found the following review helpful
2.0 out of 5 stars A science journalist decides to write about the economy, May 19, 2013
By 
Jackal (New Hampshire) - See all my reviews
This review is from: Forecast: What Physics, Meteorology, and the Natural Sciences Can Teach Us About Economics (Hardcover)
Here we go again: The author argues that economics has not understand positive feedback mechanism (Fine!). Then a couple of chapters of overview of economics; basically the standard critique of neoclassical economics (Again?). The bulk of the book talks about complexity, weather phenomena, and several books that the author has read (Okay, but please show me the meat!). We do not get any engagement with any economic theory; neoclassical or alternative. We are told that economics can learn from the mathematics of physics, but not exactly how. (Is that all?)

The book is written by a science journalist and he is constantly overpromising and underdelivering in this book. For instance, he calls himself a physicist, but I do not see a list of his papers. I am very disappointed because I thought somebody calling himself a physicist would have some direct experience doing research. Instead we get the standard pop-science book, in which the author interviews a bunch of experts and then reads some academic papers here and there, and finally writes it up. I am quite tired of this formula, unless it is done really well or on a novel topic (e.g. Gladwell). Do yourself a favor, there are many clips on the web with the author. Watch some and if you like what you see, buy the book.

The book is decently written, but it is neither brilliant nor novel. It is very much a journalist telling a story. If you haven't read anything about critique of neoclassical economics and want to have some understanding, the book is not totally bad. (Hence, the two stars.) Physics has indeed something to teach finance and economics. (That is the real physicists, not the ones who are really only journalists.) However, if you have a critical mind, you will have the question of whether you can trust this journalist on both economics and physics in your mind.

There are just too many books out there and I cannot really recommend this one. If you want to read about the failings of economics, try: The Misbehavior of Markets: A Fractal View of Financial Turbulence (good book) for finance. For economics maybe Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics (author also full of himself, but makes a better job than the current author) or Debunking Economics - Revised and Expanded Edition: The Naked Emperor Dethroned? (author slightly full of himself, but not so bad). However, bear in mind that these books critique a lot but does not have an alternative solution.

Two slightly broader books that I really can recommend are The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street and The Mind and the Market: Capitalism in Western Thought. These later two books are much better and highly recommended.

Advice to author: You write well, but stick to science journalism. And set a title that reflects the content of the book. And don't blame the editor for having written the title.
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6 of 6 people found the following review helpful
4.0 out of 5 stars Well written description of the new economics, August 4, 2013
By 
Russ Abbott (Culver City, Ca.) - See all my reviews
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This review is from: Forecast: What Physics, Meteorology, and the Natural Sciences Can Teach Us About Economics (Hardcover)
Mark Buchanan is a physicist turned economics writer. This book explains the ways in which macro economics has been hiding its head in the sand. The fundamental promise of current macro-economics is that the economy is explained by states of equilibrium. A standard example is prices. If the price of an item is too low, it will be more attractive to more people, who will buy more of it, which will reduce the supply and lead to an increase in price. After a while the price will adjust to a level at which it is neither too high or too low. Everything will be in balance.

That's fine, but what we really want to know about the economy is how it behaves when things are so out of balance that slight adjustments aren't enough to restore the equilibrium. Buchanan examines many such areas which macro-economics has ignored and which are important for understanding how the economy works. This is a very good book and one that people should read.

Why 4 stars instead of 5? I found the book a bit repetitive. The anti-equilibrium message is repeated too many times. In addition, there were cases where examples (or better examples) would have been helpful. So 4 stars means that it is a good book, but it could have been better.

For more details you may want to look at my chapter-by-chapter review on Google+: http://goo.gl/OlKL3.
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5 of 6 people found the following review helpful
5.0 out of 5 stars Finally, Some Scientific Rationality in Economics, December 20, 2013
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Picking up where Justin Fox's "The Myth of the Rational Market" left off, Mark Buchanan, a trained physicist, explains the relatively recent emergence of the rigorous approach to economics that mathematics and physics have used for decades. The main argument against current economics models is that they really cannot predict anything. Even weather forecasting gives us a few days warning of major events most of the time. This implies a significant flaw in the underlying model of the system. Modern economics has been dominated by the model of rational actors choosing stocks to maximize return based on their information of the system. This free flow of information then pushes the system toward equilibrium. Comparing this to weather, it is like saying that everyday "wants" to be blue skies and soft summer breezes. We all know this to be silly. But somehow, the idea of the freewill of the actors in economics changes all of this so that the model of the system is the exact opposite of the analog components of the chaotic weather system. Buchanan gives copious examples of the illusory nature of individual humans being rational over time as well as the striking similarities to the patterns of weather systems, earthquake predictions, and variety of other dynamic systems. All of these complex physical systems have well defined mathematical descriptions...except for economics. Is equilibrium-based economics really even a science in that case or is it a belief system? Perhaps Alan Greenspan could chime in.
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1 of 1 people found the following review helpful
5.0 out of 5 stars Entertaining, insightful, worth your time, October 30, 2013
This review is from: Forecast: What Physics, Meteorology, and the Natural Sciences Can Teach Us About Economics (Hardcover)
As an Economics graduate who never worked in the field because life took other turns, this books brings back memories of stuff we were taught about macro and micro economics that the author clearly illustrates are of no relevance to the real world, as in, have no power to predict much of anything. For instance, the parallels he draws between the behavior of (financial) markets and the behavior of other physical systems where 'players' interact, like the weather, or a highway full of cars, or even something as 'simple' a bowl of steel marbles, are very convincing. It teaches you, among other things, that a system with intelligent players does not make the system itself behave in intelligent ways, basically making the argument we have to learn to look at markets in a different way. I found this book entertaining, insightful, and well worth my time. Anyone who is even remotely interested in the behavior of any type of market will probably find the same. In short, well recommended.
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5.0 out of 5 stars A useful exploration of some deeply flawed economic models, August 3, 2014
A useful exploration of some deeply flawed economic models. Most of the equilibria models discussed are severely overly applied. Buchanan's use of papers from Lo on overcrowding and Haldane are especially useful. The discussions of leverage and risk are also useful.

The critique of most economic models and the twisted logic used to support them is especially well done. The lack of alternative models from economists is still a plague. Sadly many in the current academy would rather repeat and tweak deeply flawed models than make honest acknowledgements of "I don't know". The danger which Buchanan highlights is that having "bad" models and "flawed" instruments becomes a serious danger when policy makers in the private banks and public sector apply these models.

Buchanan's book is very helpful in highlighting areas that may offer help and in trying highlight ignorance packaged in math and assumptions which is passed off as science. Bad science is disappointing, bad science applied overly confidently on scale too which economics is applied is seriously dangerous, costly. Using no econometric instruments or false science and proceeding slowly and conservatively is likely a far better policy than "innovating, leveraging and competing" ever faster and harder. The credit cycle isn't likely to go away, but maybe it's amplitude and impacts to growth could be dampened.
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5.0 out of 5 stars Changes the way you view market price action., July 16, 2014
By 
Lucia (New York, NY) - See all my reviews
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Great book. I had long suspected that news has limited impact on price action. How many times have we seen an asset spin out of control for no apparent reason and then like a bike that wobbled, correct itself and keep on riding. I work in financial sales and when these moves occur, everyone from here to kingdom come calls up to ask why the move occurred and mostly , I am at a loss and have to guess at the feeble cause. What Mark does is apply the laws and rigors of physics (Think earthquakes, tornados, electrical patterns) to price action. The thing that I found most usable and fascinating, is the idea that big moves have pre-shocks and post shocks so even if you trade mortgages.. if EUR/ Romanian Leu is wigging out and USD/Korean Won is spiraling.. and Soybeans are cratering--- there might be some connection and some meaning found across the landscape that tells you a storm is brewing everywhere. In these very low volatility times there is something to be said for watching the horizon carefully for those far away storms that could be in your backyard in a second rather than retrofitting some keynsian ideas that never quite explain the entire thing.
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4 of 6 people found the following review helpful
5.0 out of 5 stars forecast, April 21, 2013
This review is from: Forecast: What Physics, Meteorology, and the Natural Sciences Can Teach Us About Economics (Hardcover)
Excellent expose of the degree to which facts are often overlooked when they in conveniently do not conform to theory. Explains how economic, and by extension political thinking, becomes dogma based and pragmatism is debased.
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5.0 out of 5 stars far more interesting and important than a blow by blow, May 14, 2014
By 
mvp1984 "straydc" (Washington, DC USA) - See all my reviews
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A quick, profitable read. Buchanan puts into clear language the problems underlying pretty much all of mainstream economic discourse. Something is seriously wrong, but it's not captured by the crazy nonsense coming out of gold bugs or Austrians or other easily dismissed gadflys. If you've wondered about the theory first, data second method of Econ, this book does a fantastic job of explaining that you are correct to be ill at ease.
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5.0 out of 5 stars Excellent Insights into the Great Recession, January 3, 2014
By 
Frank Lawlor (Austin, TX United States) - See all my reviews
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This review is from: Forecast: What Physics, Meteorology, and the Natural Sciences Can Teach Us About Economics (Hardcover)
For the past decade I just didn’t feel comfortable as the no regulation, just let the markets work libertarian philosophy took hold of both the Democrat and Republican parties.

Coming from a science background I just felt that Economics was essentially a “complex system” and like all the others in science (weather, earthquakes, computer networks, etc.) it should have lots of inherent instabilities which defined their natures (e.g. weather is notable for its storms, not its pleasant days). We wouldn’t have all pleasant days if we “just stopped regulating it”, but that seems to be the theory of current economics.

I’m glad to find someone who has made a great case for the nonsense being peddled by the economics establishment for the last couple of decades.

This is a sensible and VERY readable case for economics as yet another complex system and the need to understand the implications of that.
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4.0 out of 5 stars New empirical tools for an old essential "problematic" in economics (wish I could give 4 1/2 stars), December 25, 2013
This review is from: Forecast: What Physics, Meteorology, and the Natural Sciences Can Teach Us About Economics (Hardcover)
One of the central "problematics" in economics, is how to accurately move from the particular to the general, *even* in the existence of a valid "general theory." For instance, Adam Smith is constantly, in Wealth of Nations, making comments along the lines of "if so-and-so does XYZ, and so-and-so's entire social-economic class does XYZ too, then by extension, all the people of a great country must be inclined as well to do XYZ, and we can then see that XYZ must be true for all participants in the economy."

Hence the enormously important role played by logical assumptions, in "scaling up" an economic theory.

What Mr. Buchanan has done in Forecast, to the confusion of some of the reviewers here (and myself at first too!), is to offer a series of acutely insightful observations, drawing on the toolbox of modern physics, in order to provide new *empirical* insights into how this 'scaling up' process may actually work in reality instead of in Adam Smith's logically consistent, "it's true because it must be true" self-created, self-referential worlds.

Hence Buchanan's examination into "micro crashes" in computer-traded markets, for example, and his repeated usages of physics in order to interpret anomalies of crowd behavior that aren't factored into traditional economic models. Hence, too, Mr. Buchanan's acutely penetrating analysis of Milton Friedman's "f-twist" notions, on why it's OK to make false assumptions, may do the exact opposite of what Friedman intended -- make economics more empirical.

So even though it appears true what other reviewers have said, that "Forecast seems sometimes to meander around its intended "point" and to never offer up a new "general theory" of economics, the book still has something quite valuable to say! And more economists should pay attention! We have to have realistic expectations in mind -- Mr. Buchanan is a physicist, not the 2nd coming of John Maynard Keynes. I do admit that I get frustrated myself, in reading, when he seems to be implying that just around the corner, on the next page or next section, that he will *now* give us his "theory of everything" -- and then just gives another brilliant discussion of some physics phenomena that can be applied to economic measurements or assumptions.

What he does do, though, is delicately, surgically skewer all sorts of traditional assumption-making processes of economics, placing the scaling-from-an-individual-to-an-entire-society problematic right squarely in his crosshairs in a way that most other authors shy away from doing so sweepingly, and this is in and of itself extremely, extremely valuable. It broadens the empirical toolkit for those who *do* have a general theory at their disposal and, if taken with this grain of salt in mind, "Forecast" is ground-breaking, in concert with other similar books. I will admit I have not read many of the competing physics-to-economics books in much detail (doing so will have to be next on my list), but with that caveat, I am constantly amazed at the erudition in "Forecast," and at myself saying, "oh, of course, so *that's* how it works!" as I read the next nugget of applying physics to economics. And so after some great amount of thought, I came to the view I am giving here, that Mr. Buchanan excels at making the ubiquitous "scale-up" process more empirical and in so doing provides a unique service, even if he does not proffer us the "general theory" that some of his criticism of other persons' general theories seem to imply that he will.
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Forecast: What Physics, Meteorology, and the Natural Sciences Can Teach Us About Economics
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