Instability of Economic Systems: Signals, Asymmetric Reactions, Corrections

Giovanni Cossiga

Studies in Media and Communication, 2017, vol. 5, issue 2, 85-104

Abstract: An economic system becomes unstable when it¡¯s deviating from the compatible growth course, because of human errors. Systems have a natural tendency to linear growth so that if they deviate, the growth and price profile takes a cyclical trend. The cyclical rhythm of the economy is not an end, but it¡¯s a natural order trying to bring the economy back to its lost stability, over time. The unstable system, in promoting this return to stability, has a whole range of tools, including the spread of implicit perceptions about the economy state among companies and families: a sort of signal widespread by the sick economy. So, every common man is perceiving the country system malaise, nevertheless without having a direct knowledge of the problems and their causes. Starting from this implicit perception, the democratic process and the periodic use of polls are to be considered not only as the exercise of civic rights, but also as a test for the choice of a good government that would implement the program to balance again the unstable system. The collective wisdom of the people in selecting their own rulers, thus is moving in the context of the economy¡¯s general tendency to the stability and to the compatibility with the natural environment. Moreover, the asymmetric market reaction is also reported. The system reacts to a prolonged instability with speculative waves inexorably converging towards the financial crisis, to clean up the corrupt system. Finally, a mention to the Euro theme is also made.

Keywords: instability; asymmetric reactions; natural correction; deflationary tendency (search for similar items in EconPapers)
Date: 2017
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