It’s a bad week for autocrats and that’s a good thing.
Dr. Rutledge, thank you for the great piece. I could read/talk about power laws all day. I think the theory that autocratic regimes increase power law behavior is a great one. I would imagine that if we look at the data, markets under autocratic regimes will experience a high number of small variations and a small number of extreme variations. Autocrats don't like volatility so natural evolution gets squashed out and they're left with a system lacking enough medium (healthy) volatility to clear out the garbage. Everything looks great until cleaning day happens all at once. If anyone picks up this thread for a research project, here are a few good resources on the empirics of power laws that I found very helpful when writing one of my papers. https://arxiv.org/pdf/0706.1062.pdf & https://arxiv.org/pdf/2001.10488.pdf