chaos theory

Mathematical framework for understanding irregular and erratic fluctuations in economic cycles, financial markets, weather, other complex phenomenon, or non-linear systems with many variables. It suggests that small changes in the starting conditions produce outcomes totally out of proportion to their magnitude, making the phenomenon or system inherently unpredictable in the long term. Based largely on the work of French mathematician Jules Henri Poincaré (1854-1912). Also called chaology. See also chaotic system.