Tuesday, 15 November 2011

We all do economics

The very interesting blog, Mind Hacks, has a post on a theory of a bipolar economy.
A 1935 Psychological Review article proposed a ‘manic-depressive psychoses’ theory of economic highs and lows based on the idea that the market has a form of monetary bipolar disorder.
I find it quite interesting how people like to reframe the problem of economic crashes in their own subject. In psychology it seems perfectly natural to ascribe the behaviour to individual human behaviour. As a physicist I'm completely convinced that it's a collective effect that arises from many relatively simple individuals, trying to win a game, interacting in a highly complex system. Of course one could possibly say the same about the brain itself.

I wonder if biochemists have some hormone explanation and neuroscientists some neurotransmitter reason. Perhaps all these perspectives are equally right (or wrong) – I guess the only thing for sure is that we don't really know!

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