Faced with phenomena I view as self-affine, other students take an extremely different tack. Most economists, scientists and engineers from diverse fields begin by subdividing time into alternating periods of quiescence and activity. Examples are provided by the following contrasts:
between turbulent flow and its laminar inserts, between error-prone periods in communication and error-free periods, and between periods of orderly and agitated ("quiet" and "turbulent") Stock Market activity. Such subdivisions must be natural to human thinking, since they
are widely accepted with no obvious mutual consultation. Rene Descartes endorsed them by recommending that every difficulty be decomposed into parts to be handled separately. Such subdivisions were very successful in the past, but this does not guarantee their continuing success. Past investigations only tackled variability and randomness that are mild, hence, local. In every field where variability / randomness is wild, my view is that such subdivisions are powerless. They can only hide the important facts, and cannot provide understanding. My alternative is to move to the above-mentioned apparatus centered on scaling.
-Mandelbrot, in the foreward to Multifractals and 1/f Noise.
it's worth saying that Mandelbrot was apparently a large influence to E Fama, who proposed the efficient market hypothesis in the first place.
-Mandelbrot, in the foreward to Multifractals and 1/f Noise.
it's worth saying that Mandelbrot was apparently a large influence to E Fama, who proposed the efficient market hypothesis in the first place.