The Rules of Contagion: Why Things Spread - and Why They Stop

by Adam Kucharski

Another person to join the Federal Reserve discussions was Robert May, who had previously supervised Sugihara’s PhD. An ecologist by training, May had worked extensively on analysis of infectious diseases. Although May was drawn into financial research largely by accident, he would go on to publish several studies looking at contagion in financial markets. In a 2013 piece for The Lancet medical journal, he noted the apparent similarity between disease outbreaks and financial bubbles. ‘The recent rise in financial assets and the subsequent crash have rather precisely the same shape as the typical rise and fall of cases in an outbreak of measles or other infection,’ he wrote. May pointed out that when an infectious disease epidemic rises it’s bad news, and when it falls, it’s good news. In contrast, it’s generally seen as positive when financial prices rise and bad when they fall. But he argued that this is a false distinction: rising prices are not always a good sign. ‘When something is going up without a convincing explanation about why it’s going up, that really is an illustration of the foolishness of the people,’ as he put it.[14]