"Butterflies on the Street," by John Allen Paulos. New York Times, 19July 1996, page A27.
In this brief editorial, John Allen Paulos muses about connections betweenchaos theory and the volatility of the stock market. Chaostheory implies that, just as the proverbial flutter of butterfly wings in onepart of the world can lead to a storm in another, so small changes in thesalaries of a few high-priced executives can set off fluctuations in the stockmarket. Paulos relates these ideas to the abstract question of predicting thepath of a billiard ball, as well as to more practical considerations such asthe consequences of slight errors in the Consumer Price Index.