TED talks: how we can predict the next financial crisis – Didier Sornette

In an effort to avoid incidences like the financial crisis that begun in 2007, Didier Sornette has developed a way to predict future crashes. He gave a recent TED talk explaining his idea.

Sornette, of the Financial Crisis Observatory (FCO) in Switzerland, says financial crises don’t come out of the blue. His ‘dragon kings’ theory suggests that these occurrences are visible before they happen.

“The dragon-king theory gives hope“, he says.

“We learn that most systems have pockets of predictability. It is possible to develop advance diagnostics of crises so that we can be prepared, we can take measures, we can take responsibility, and so that never again will extremes and crises like the Great Recession or the European crisis take us by surprise.”

Watch the talk below to find out how.

To watch this video on the TED website, click here.