May 3, 2011
Why is surprise the permanent condition of the US political and economic elite? So ask Institute Professor Mark Blyth and his co-author, Nassim Nicholas Taleb, a professor of risk engineering at New York University’s Polytechnic Institute, in an article in the May/June issue of Foreign Affairs.
The critical issue in both the recent global financial crisis and more recent turmoil in the Middle East and North Africa, they say, is the artificial suppression of volatility in the name of stability. “Complex systems that have artificially suppressed volatility tend to become extremely fragile, while at the same time exhibiting no visible risks.”
Their analysis has been well received, in settings ranging from the Council on Foreign Relations, for instance, to the Business Times of Singapore.