Thomas Kuhn, The Structure of Scientific Revolutions (1962), elucidates the process by which new information is transformed into knowledge. A cyclical process of continuing modification. Kuhn, working in the history of science, identified periods of “Normal Science” in which most scientists work on problems approved by the dominant “Paradigm”; a period in which “Anomalies” that are inexplicable under the paradigm accumulate; precipitating a “Crisis”, eventually leading to “Revolution”; Out of the Revolution eventually emerges a new Paradigm. And the cycle begins.
This conceptual framework is particularly useful when applied to financial markets.