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Author: FastMike Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 457573  
Subject: Re: Catastrophe theory, instability, risk Date: 10/9/2012 3:10 PM
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"...Catastrophe theory reminds us that instability can lead to sudden crises, as we saw just 4 years ago..."

Dear Wendy :

Thanks for posting 'Mauldin's sand pile' example! It's just beautiful and describes the process from stability to instability back to stability again, like, off the charts terrific!!

I've read a bit about the Minsky's "The Modeling of Financial Instability" and indeed, it uses Catastrophe theory to describe that seemingly unavoidable process. (and it was central to, er... 12 October, 1492, A Sojourn:^)

I'd like to mention a very thorough overview of this very new area of mathematics. The text was compiled by Manfred Schroeder and titled "Fractals, Chaos, Power Laws Minutes from an Infinite Paradise". It's sprinkled with puns, does not go in depth, but covers all major topics and then some. It's like a 'Catasthrophe handbook'.

That sandpile describes it all so well!

Your discovering Fool,
FM

(As prerequisite it is well worth going over the laws of exponents and logarithms. And there's a humorous and really interesting section on "Fibonacci's rabbits")
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