The Economy as a Complex Social Network

Finance session -  introduction

Hamid Benbrahim (Fidelity Investments)
The Economy as a Complex Social Network

Economics, historically failed to capture the true dynamics of the economy and predict its movements. This is due to three factors: limited observability, false assumptions, and an inadequate model. This talk will address the model.

While economic theory focuses on aggregate measures, financial markets which act as the engine of the economy deal with variability within the system rather than its aggregate. Financial markets distribute resources towards where they are most productive exploiting local variances. This is a fundamental disconnect that explains the fallacy of many economic models.

As the economy is ultimately driven by consumption, it is essential to understand the consumer system. Social Network Analysis represent an invaluable set of tools to gain insight into the behavior of such a system.