"In my next several blog posts I want to talk about scaling, especially about the very recent controversies surrounding claims of power-law scaling of particular phenomena [...] All this is going to require some forays into the wild and unruly land of statistics and data analysis. My goal in the next series of posts is to make sense of the following quite important papers in complex systems, which, taken together, form a kind of mini-course on scaling. Understanding ideas from these papers is essential in one’s education as a complex-systems scientist or informed “consumer” of this field."

"We analyze consequences of changing the terms of trade between agriculture and industry on capital accumulation and on welfare of workers in different sectors. The issue was central to Soviet industrialization debate and it remains important in today's developing world. Through a simple general equilibrium model, we show that a price squeeze on peasants increases accumulation (as Preobrazhensky argued), but it makes both urban and rural workers worse-off (contrary to Preobrazhensky's contention). The desirable changes in terms of trade are shown to depend on intertemporal valuations, but, within a range, not on rural-urban welfare trade-off. Our characterization of the optimal terms of trade is remarkably simple, in which the roleof welfare weights and of relevant empirical parameters are easily as certained.We then extend our analysis to economies with labor mobility and unemployment and, using a simple model with rigid industrial wage, show that the optimal terms of trade entail a tax on urban sector,a subsidy to rural sector, and a level of urban employment such that the urban wage exceeds the marginal product of urban worker."

Series: New Economic Windows
Faggini, Marisa; Lux, Thomas (Eds.)
2009, XIV, 170 p.
Hardcover, ISBN 978-88-470-1082-6

Scoones, I., Leach, M., Smith, A., Stagl, S., Stirling, A. and Thompson, J.
(2007) Dynamic Systems and the Challenge of Sustainability, STEPS Working Paper 1,
Brighton: STEPS Centre

"While it is usually thought that diversification of risk always leads to a more stable financial system, in our model a tension emerges between individual risk and systemic risk. As the number of counterparties in the credit network increases beyond a certain value, the default probability, both individual and systemic, starts to increase. This tension originates from the fact that agents are subject to a financial accelerator mechanism. In other words, individual financial fragility feeding back on itself may amplify the effect of an initial shock and lead to a full fledged systemic crisis. The results offer a simple possible explanation for the endogenous emergence of systemic risk in a credit network."

"Canada should be poised to capitalize on this opportunity to feed the world. ...And yet despite this unprecedented opportunity for Canada to again become a global food superpower, the Canadian agriculture and agri-food business is not even keeping pace. Our share of world markets is falling, not rising, our agricultural
productivity is falling, not rising, our influence in world trade talks about agriculture is falling, not rising. As a result, our
rural communities are foregoing greater prosperity, our food processors are losing out on export opportunities and our economy is missing out on potential growth. That is a missed opportunity for Canada. But it is also far more: at a moment when it is not clear that the world can meet the growing demand for food, it is a potential humanitarian tragedy for the globe. Canada faces both an economic and a moral imperative to do better."

""At times of crisis," notes eminent Marxist geographer Harvey (Spaces of Global Capitalism), "the irrationality of capitalism becomes plain for all to see." Harvey excels at a revealing and constructive analysis of global capitalism at a moment when its integration--and the attendant widespread susceptibility to its disruptions and downturns--has never been tighter or the post–cold war Western economic model for the world economy more discredited. The narrative delineates with admirable clarity the arcane details of the current financial crisis, while rehearsing the rise of capitalism as a historically specific "process" plagued by fundamental dilemmas. A Marxist perspective comes augmented and nuanced by wide reference to scholarship, close readings of Marx and Engels, and instructive examples of capitalismÖs basic tendencies in episodes like Henry FordÖs notorious Fordlandia venture in the Amazon. While certain to be controversial even on the broad left, HarveyÖs analysis joins other recent attempts (such as Raj PatelÖs The Value of Nothing) to re-think the current economic and political regime from its roots, while identifying and variously championing ready alternatives already manifesting themselves within it."