Finance-Centric Economies

The essays in this publication highlight the peculiar characteristics of Finance-Centric Economies. The essays will equip public policy makers, economists, and central bankers with the knowledge they need while financial syndicates with the best talent pool set out to outmaneuver or outsmart political administrations and governments. Policy makers need to understand that the industrially advanced economies have some things in common with electrical circuits. Often, money making its way through an industrially advanced economy is analogous to electrical energy flowing through a complex circuit. What ultimately matters is the aggregate impact of individual circuit components acting in concert within a complex electrical system. What matters more within any industrially advanced economy is the aggregate characteristic of a networked system rather than the individual behavior of circuit components. However, economists from the traditional schools rarely set out to examine the collective behavior of economic components within existing financial networks in the foreground. An engineering analysis of an industrially advanced economy will provide new insights and help in identifying hidden structural problems within a complex economy. Moreover, managing finance-centric and knowledge-centric economies is an altogether different ball game. In fact, systems engineers need to be brought in to take the bull by the horns and steer the economy in the right direction. However, for many critical evolutionary processes to naturally occur within civilizations, industrially advanced societies need to immediately distance themselves from conformist political thinking from the pre-industrial age. Public policy makers would need to transgress into uncharted territories. In particular, political administrations need to abandon both right wing and left wing ideologies. Solutions to most economic problems in the industrially advanced world actually lie in the mathematical domain far removed from both left wing and right wing thinking. In many liberal democracies, voters tend to elect political candidates with superior oratory skills. However, politicians with oratory skills might not possess enough technical sophistry to be able to manage highly complex industrial economies. In fact, the industrially advanced nations of the world might actually need a new generation of business friendly political candidates with expertise in finance, investment banking, and systems engineering.