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We propose a factor network autoregressive (FNAR) model for time series with complex network structures. The coefficients of the model reflect many different types of connections between economic agents ("multilayer network"), which are…
Elements of networks interact in many ways, so modeling them with graphs requires multiple types of edges (or network layers). Here we show that such multiplex networks are generically more vulnerable to global cascades than simplex…
The latest financial crisis has painfully revealed the dangers arising from a globally interconnected financial system. Conventional approaches based on the notion of the existence of equilibrium and those which rely on statistical…
Many economic activities are embedded in networks: sets of agents and the (often) rivalrous relationships connecting them to one another. Input sourcing by firms, interbank lending, scientific research, and job search are four examples,…
Endogenous, ideas-led, growth theory and agent based modelling with neighbourhood effects literature are crossed. In an economic overlapping generations framework, it is shown how social interactions and neighbourhood effects are of vital…
A probabilistic framework is introduced that represents stylized banking networks and aims to predict the size of contagion events. In contrast to previous work on random financial networks, which assumes independent connections between…
The paper analyses trade between the most developed economies of the world. The analysis is based on the previously proposed model of international trade. This model of international trade is based on the theory of general economic…
To understand how fluctuations arise and are distributed in international trade, a question crucial for economic risk assessment and policymaking, we analyze strong adverse fluctuations-collapsed trades-defined as individual trades with…
We investigate the problem of cross-cultural interactions through mass media in a model where two populations of social agents, each with its own internal dynamics, get information about each other through reciprocal global interactions. As…
Previous models of international conflict have suffered two shortfalls. They tended not to embody dynamic changes, focusing rather on static slices of behavior over time. These models have also been empirically evaluated in ways that…
This paper analyzes the global dynamics of 1-dimensional agent arrays with nearest neighbor linear couplings. The equations of motion are second order linear ODEs with constant coeffcients. The novel part of this research is that the…
Models of threshold driven contagion explain the cascading spread of information, behavior, systemic risk, and epidemics on social, financial and biological networks. At odds with empirical observation, these models predict that…
Simple agent based exchange models are a commonplace in the study of wealth distribution in an artificial economy. Generally, in a system that is composed of many agents characterized by their wealth and risk-aversion factor, two agents are…
We propose a means to relate properties of an interconnected system to its separate component systems in the presence of cascade-like phenomena. Building on a theory of interconnection reminiscent of the behavioral approach to systems…
We study systems of interacting reinforced stochastic processes, where agents' decisions evolve under reinforcement, network-mediated interactions, and environmental influences. In competitive environments with irreducible networks, we…
The Goodwin model of endogenous growth looks to study the dynamic interaction between employment rate and worker's share of national income in an economy. The model is simplistically and elegantly described by a set of differential…
Complex contagions describe systems where the probability or rate of contagious transmission is a nonlinear function of the exposure to contagious agents. These models were first studied theoretically but have since been used to capture…
The global financial system is highly complex, with cross-border interconnections and interdependencies. In this highly interconnected environment, local financial shocks and events can be easily amplified and turned into global events.…
Reliable functioning of infrastructure networks is essential for our modern society. Cascading failures are the cause of most large-scale network outages. Although cascading failures often exhibit dynamical transients, the modeling of…
Modern macroeconomic theories were unable to foresee the last Great Recession and could neither predict its prolonged duration nor the recovery rate. They are based on supply-demand equilibria that do not exist during recessionary shocks.…