Friday, March 31, 2006

Integral Accidents

Icelanders have their knickers in a twist (see here(pdf) and  here(pdf)) over a Danish piece of research(pdf) by Danske Bank, which claims that their economy is the most overheated in the OECD. Unsurprisingly, Icelanders disagree - but investors are fleeing like rats a sinking ship (the metaphor would hold better if ships were powered by rats pedalling, but anyway).
 
Brad Setser has remarked on how much this reminds him of the Asian crash. All this reminds me, rather, of Paul Virilio 's concept of the 'integral accident' - that is, the idea that every technology has its own accident: "To invent the train is to invent derailment; to invent the ship is to invent the shipwreck".
 
Do 'information accidents' happen in our new 'knowledge economy'? Are we witnessing a ripple of lost confidence spread through emerging markets after the Great Arabian Bubble finally burst? I have no real way of knowing, but I wonder.

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