Mathematical Digest

Short Summaries of Articles about Mathematics
in the Popular Press

"Market calms beforestorm," by Philip Ball. Nature Science Update, 25 May 2001.

Economic crashes are notoriously difficult to predict. They may be triggeredby small, chance fluctuations that, à la chaos theory, have enormouseffect. This brief article discusses a mathematical model that "can senseimminent instability" in a financial market. The model sometimes enters a"predictable corridor", which permits exceptionally good prediction ofshort-term variations and which often presage crashes.

--- Allyn Jackson