Subscription Center
Mar 13, 2009 | 6
In a lecture at Columbia University this week, famed fractal pioneer Benoit Mandelbrot once again inveighed against traditional economic theories, returning at a time of financial malaise to many of the points he raised in a 1999 Scientific American feature. (In September 2008, as the U.S. economy began to shake, editor Gary Stix provided a brief recap of Mandelbrot's article and the ensuing response from readers in this blog post.)
Mandelbrot, 84, spoke at the Festival della Matematica, or Mathematics Festival, an event produced jointly in Rome and New York City by a consortium of Italian governmental and cultural agencies.
A persistent complaint levied by the Wolf Prize–winning French mathematician: many economic models ignore dramatic jumps, whether in a commodity's price or in an index such as the S&P 500, treating them as outliers. But real-life economic systems, Mandelbrot said, are "dominated by details"—the extreme cases, and specifically the outer 5 percent, are just as important as the rest of the data. To prove his point, Mandelbrot showed a graph of the S&P since 1985, overlaid with the same data minus the wild swings that constitute the outliers. The two graphs were completely different, implying that to ignore the extreme cases is to ignore reality. "I'm extremely visual," Mandelbrot said. "Often the pictures suggest the deeper truth underlying the formulas."
See what we're tweeting about
EricROlson Farm Equipment That Runs on Oats http://t.co/Yst4TzDkjm #longreads @nytimes
BoraZ :-) RT @mistersugar: New blog post: Handshake from a master chef - with photo by @boraz. http://t.co/1PJzKAC07L
johnrplatt Deadly Snakes, Ugly Critters, Leonardo DiCaprio and Other Links from the Brink | #Extinction Countdown http://t.co/pbQGYG5G26 #sciamblogs
Deadline: Jun 29 2013
Reward: $7,000 USD
The Seeker for this Challenge desires proposals for chemical methods that could rapidly degrade a dilute aqueous solution
Deadline: Jul 25 2013
Reward: Varies
This challenge provides an opportunity for Solvers to build a web-based or mobile “app” to explore data relationships in scholarly conte
Powered By: 
YES! Send me a free issue of Scientific American with no obligation to continue the subscription. If I like it, I will be billed for the one-year subscription.
