Xavier Gabaix on The Shape of Big Things

Cities, firms, market crashes and CEO pay all follow the same statistical shape. Xavier Gabaix has spent his career working out why.

He is the Pershing Square Professor of Economics and Finance at Harvard, a mathematician by training from the École Normale Supérieure, and a winner of the Fischer Black Prize.

We talk about what that shared shape means for anyone who treats big companies as a problem to be corrected. We get into how a few very large firms can move a whole national economy, and why the standard objection, that individual shocks cancel out, fails. We finish on the cost of thinking, which he has measured, and what becomes of that cost once the thinking can be handed to a machine.