A researcher from a business broadsheet wrote me if I can help in their article to establish the relationship between oil prices and Philippine financial assets.
Though I would like to help and am profusely thankful for such opportunity, I realized that it would likely take me laborious effort, perhaps more than 20+ or more pages (a paper) to explain the many possible transmission channels of oil prices to asset prices. And not only will this be time consuming to explain complex relationships, in the understanding of how mainstream media operates, complex discussions will only be truncated or simplified--so I backed off.
Here is my reply:
There is what is known as the chaos theory. For instance, mathematician Edward Lorenz explains that a flapping of the wings of a butterfly can cause hurricane in parts of the world (Butterfly effect). The issue of the butterfly effect is the non-linearity of causal linkages. I believe that a lot of your questions invoke the butterfly effect: the linkages won’t be linear, so this will be hard to explain to the public who looks for simplified explanations of complex dynamics.
