From McKinsey quarterly:

Scientists, sometimes in cooperation with economists, are taking the lead in a young field that applies complexity theory to economic research, rejecting the traditional view of the economy as a fully transparent, rational system striving toward equilibrium.

Many other scientists in the field of complexity theory argue that earthquakes, forest fires, power blackouts, and the like are extremely difficult or even impossible to foresee because they are the products of many interdependent “agents” and cascades of events in inherently unstable systems that generate large variations.

See the image below for the eerie correlation between banking crisis and earthquakes in So. Cal.

These examples indicate that power law patterns, with their small, frequent outcomes mixed with rare, hard-to-predict extreme ones, exist in many aspects of the economy. This suggests that the economy, like other complex systems characterized by power law behavior, is inherently unstable and prone to occasional huge failures.