Editor's Summary
30 October 2008
Economics in crisis: a scientific solution
With stock markets at decadal lows, money markets frozen and recession looming, economics is in the dock. In an Essay this week, Jean-Philippe Bouchaud argues that the economic sciences that failed to predict these events need to up their game. The critical approach to axioms and models that is characteristic of the natural sciences has been suspended, with notions such as the primacy of the marketplace untested, raised to the status of dogma. A revolution in economics is overdue, based on new economic models that give a more realistic representation of the financial markets.
Essay: Economics needs a scientific revolution
Financial engineers have put too much faith in untested axioms and faulty models, says Jean-Philippe Bouchaud. To prevent economic havoc, that needs to change.
Jean-Philippe Bouchaud
doi:10.1038/4551181a
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