Related papers: Correlations, Risk and Crisis: From Physiology to …
In this chapter the complex systems are discussed in the context of economic and business policy and decision making. It will be showed and motivated that social systems are typically chaotic, non-linear and/or non-equilibrium and therefore…
In this brief review, we critically examine the recent work done on correlation-based networks in financial systems. The structure of empirical correlation matrices constructed from the financial market data changes as the individual stock…
The hypothesis that living systems can benefit from operating at the vicinity of critical points has gained momentum in recent years. Criticality may confer an optimal balance between exceedingly ordered and too noisy states. We here…
This paper develops a dynamic factor model in which common level and volatility factors evolve jointly, allowing conditional means and variances to interact endogenously within a large-information setting. The joint evolution of these…
Climate-related phenomena are increasingly affecting regions worldwide, manifesting as floods, water scarcity, and heat waves, significantly impairing companies' assets and productivity. It is essential for asset managers to quantify the…
Causality plays a central role in understanding interactions between variables in complex systems. These systems often exhibit state-dependent causal relationships, where both the strength and direction of causality vary with the value of…
Determining and measuring cause-effect relationships is fundamental to most scientific studies of natural phenomena. The notion of causation is distinctly different from correlation which only looks at association of trends or patterns in…
Much of interesting complex biological behaviour arises from collective properties. Important information about collective behaviour lies in the time and space structure of fluctuations around average properties, and two-point correlation…
We discovered that past changes in the market correlation structure are significantly related with future changes in the market volatility. By using correlation-based information filtering networks we device a new tool for forecasting the…
Biological organisms are adaptive, able to function in unpredictably changing environments. Drawing on recent nonequilibrium physics, we show that in adaptation, fitness has two components parameterized by observable coordinates: a static…
Perfect adaptation in a dynamical system is the phenomenon that one or more variables have an initial transient response to a persistent change in an external stimulus but revert to their original value as the system converges to…
Approaches to understanding resilience from psychology and sociology emphasise individuals' agency but obscure systemic factors. Approaches to understanding resilience stemming from ecology emphasise system dynamics such as feedbacks but…
A review of economic approaches showed the lack of a universal method for assessing management decisions in the face of an increasing volume of analyzed data and changing parameters of the external environment. The method of integral…
A generalized fluctuation-response relation is found for thermal systems driven out of equilibrium. Its derivation is independent of many details of the dynamics, which is only required to be first-order. The result gives a correction to…
Emergence and causality are two fundamental concepts for understanding complex systems. They are interconnected. On one hand, emergence refers to the phenomenon where macroscopic properties cannot be solely attributed to the cause of…
Excessive leverage, i.e. the abuse of debt financing, is considered one of the primary factors in the default of financial institutions. Systemic risk results from correlations between individual default probabilities that cannot be…
We are living in an uncertain and dynamically changing world, where optimal decision-making under uncertainty is directly linked to the survival of species. However, evolutionary selection pressures that shape value-based decision-making…
This chapter introduces evolutionary antifragility as the time-scale interaction characteristics of a natural dynamic system. It describes the benefit derived from input distribution unevenness, based on the emergent system dynamics and its…
A celebrated and controversial hypothesis conjectures that some biological systems --parts, aspects, or groups of them-- may extract important functional benefits from operating at the edge of instability, halfway between order and…
Population dynamics deals with the collective phenomena of living organisms, and it has attracted much attention since it is expected to explain how not only living organisms but also human beings have been adapted to varying environments.…