Systemic understanding of stock market index behavior using control theory

Mario G. Beruvides, Luis A. Barroso

Research output: Contribution to conferencePaperpeer-review

Abstract

General System Theory (GST) allows for any system to be viewed as a whole instead of reducing it to its elements. This study presents an argument for why the stock market may be considered a techno-organic system. A system with organic elements, technical elements, and a symbiotic relationship between those components with growth patterns that parallel organic systems. The study is based on techno-organic systems behavior and statistical process control to describe and determine whether the stock market, as seen by the behavior of some of its indexes (Dow Jones, S&P 500, and NASDAQ), is a system in control. Findings showed that the stock market is a system in control. The market was out of control approximately 0.2% of the time over a 14 month period. The techno-organic systems approach and the implications that the development of such technology could be greatly beneficial to better understanding stock market behavior and potentially other complex systems with similar characteristics.

Original languageEnglish
Pages204-208
Number of pages5
StatePublished - 2007
Event28th Annual National Conference of the American Society for Engineering Management 2007 - Innovation Management: Innovation in a Flattened World, ASEM 2007 - Chattanooga, TN, United States
Duration: Nov 7 2007Nov 10 2007

Conference

Conference28th Annual National Conference of the American Society for Engineering Management 2007 - Innovation Management: Innovation in a Flattened World, ASEM 2007
Country/TerritoryUnited States
CityChattanooga, TN
Period11/7/0711/10/07

Keywords

  • Control charts
  • Non-zero slope growth
  • Stock market

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