A simple complex system insight into macroeconomics

The economic crisis of 2008 was unanticipated by mainstream economics, and only explicable in its dominant DSGE paradigm via the assumption of large exogenous shocks. However a simple three equation complex system model, derived simply from introducing debt-financed investment into a classic cyclical model of the economy, can generate the primary features of both the crisis and the so-called “Great Moderation” which preceded it.