Related papers: Are large complex economic systems unstable ?
Most complex systems are nonlinear, relying on emergent behavior from interacting subsystems, often characterized by oscillatory dynamics. Collective oscillatory behavior is essential for the proper functioning of many real world systems.…
Complex evolving systems such as the biosphere, ecosystems and societies exhibit sudden collapses, for reasons that are only partially understood. Here we study this phenomenon using a mathematical model of a system that evolves under…
The question of the stability of unstable states of dynamical systems that do not explicitly contain a small parameter, chaos and bifurcations in them has attracted attention ever since [1-14]. This is due to the fact that this problem…
A class of polynomial dynamical systems called complex-balanced are locally stable and conjectured to be globally stable. In general, complex-balancing is not a robust property, i.e., small changes in parameter values may result in the loss…
A central issue in the study of large complex network systems, such as power grids, financial networks, and ecological systems, is to understand their response to dynamical perturbations. Recent studies recognize that many real networks…
Various formulations of counterfactual general equilibrium in economies -- systems of actors manipulating economic goods -- are logically and mathematically analyzed. Evenly-rotating economies are systems whose evolution is stable, steady,…
The global financial crisis in 2007-2009 demonstrated that systemic risk can spread all over the world through a complex web of financial linkages, yet we still lack fundamental knowledge about the evolution of the financial web. In…
The basic laws of physics are simple, so why is the world complex? The theory of self-organized criticality posits that complex behavior in nature emerges from the dynamics of extended, dissipative systems that evolve through a sequence of…
Over fifty years ago, Robert May applied random matrix theory to show that as ecological systems grow in size, stability decreases. What emerged from this and the critique that followed was decades of what has been called the…
Trade networks, across which countries distribute their products, are crucial components of the globalized world economy. Their structure is strongly heterogeneous across products, given the different features of the countries which buy and…
Classic economic science is reaching the limits of its explanatory powers. Complexity science uses an increasingly larger set of different methods to analyze physical, biological, cultural, social, and economic factors, providing a broader…
This paper develops a dynamic monetary model to study the (in)stability of the fractional reserve banking system. The model shows that the fractional reserve banking system can endanger stability in that equilibrium is more prone to exhibit…
In the past few years, the discoveries of small-world and scale-free properties of many natural and artificial complex networks have stimulated significant advances in better understanding the relationship between the topology and the…
Persistent economic competition is often justified as a mechanism of innovation, efficiency, and welfare maximization. Yet empirical evidence across disciplines reveals that competition systematically generates fragility, inequality, and…
How do networks of relationships evolve over time? We analyse a dataset tracking the social interactions of 900 individuals over four years. Despite continuous shifts in individual relationships, the macroscopic structural properties of the…
Business cycles (a periodic change of e.g. GDP over five to ten years) exist, but a proper explanation for it is still lacking. Here we extend the well-known NAIRU (non-accelerating inflation rate of unemployment) model, resulting in a set…
Social, biological and economic networks grow and decline with occasional fragmentation and re-formation, often explained in terms of external perturbations. We show that these phenomena can be a direct consequence of simple imitation and…
The modeling of complex systems such as ecological or socio-economic systems can be very challenging. Although various modeling approaches exist, they are generally not compatible and mutually consistent, and empirical data often do not…
Many complex systems exhibit extreme events far more often than expected for a normal distribution. This work examines how self-similar bursts of activity across several orders of magnitude can emerge from first principles in systems that…
We describe a new complex system model of an evolving production economy. This model is the simplest we can envisage which incorporates the new observation that the rate of an economic production process depends only on the minimum of its…