Financial System As A Complex One
The expansion of life from simple to multipart, from multi-cellular organisms to human beings, testifies in opposition to this widespread constant. On the other hand, the growth of humans has not brought an end to expansion in natural creatures. Humans have turned out to be self-aware; humans have connected together to outline a composite system called the social order; societies act together to form composite geopolitical systems. The whole thing is more and more complex, with escalating levels of higher-order systems shaped from lower-order ones. Our everyday practice does not prove in the least the function of the Second Law of Thermodynamics.
A closed system for the investigation is a system that is cut off from its environment, but financial market is not clearly closed, though in some cases this system as well does not exchange information or flows with its surroundings. Such scientist as Prigogine studied unlocked systems, those that act together or frustrate with the situation, that switch over matter, energy, and / or information with the background. Financial system is clear to be one of those where progress occurs in the open structure through the development of disorder. The creation of order in such a system also requires a little bit of chaos. However, one more unpredicted matter arose – in the case of an unlocked system, the stage of disorder within the system itself is greater than before, but each open system enlarge the entropy outside of itself. Financial market is that type of system where during the development itself the level of chaos outside of this market grows much faster. And that is the problem for modern analysts and theoretic scientists.