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Historically, the economic recession often came abruptly and disastrously. For instance, during the 2008 financial crisis, the SP 500 fell 46 percent from October 2007 to March 2009. If we could detect the signals of the crisis earlier, we…

Statistical Finance · Quantitative Finance 2024-01-15 Yue Chen , Xingyi Andrew , Salintip Supasanya

Topological data analysis has been acknowledged as one of the most successful mathematical data analytic methodologies in various fields including medicine, genetics, and image analysis. In this paper, we explore the potential of this…

Statistical Finance · Quantitative Finance 2020-08-27 Wonse Kim , Younng-Jin Kim , Gihyun Lee , Woong Kook

The crowd panic and its contagion play non-negligible roles at the time of the stock crash, especially for China where inexperienced investors dominate the market. However, existing models rarely consider investors in networking stocks and…

General Finance · Quantitative Finance 2018-04-26 Shan Lu , Jichang Zhao , Huiwen Wang , Ruoen Ren

Building fires pose a persistent threat to life, property, and infrastructure, emphasizing the need for advanced risk mitigation strategies. This study presents a data-driven framework analyzing U.S. fire risks by integrating over one…

Machine Learning · Computer Science 2025-04-01 Chenzhi Ma , Hongru Du , Shengzhi Luan , Ensheng Dong , Lauren M. Gardner , Thomas Gernay

The objective of the present study is twofold. First, the last developments and validation results of a hybrid model designed to simulate fire patterns in heterogeneous landscapes are presented. The model combines the features of a…

Atmospheric and Oceanic Physics · Physics 2016-02-08 Mohamed Drissi

We address the problem of banking system resilience by applying off-equilibrium statistical physics to a system of particles, representing the economic agents, modelled according to the theoretical foundation of the current banking…

Risk Management · Quantitative Finance 2013-01-04 João P. da Cruz , Pedro G. Lind

Wildfires can severely damage electricity grids leading to long periods of power interruption. Climate change will exacerbate this threat by increasing the frequency of dry climate conditions. Under these climate conditions, human-related…

Optimization and Control · Mathematics 2023-06-13 Alexandre Moreira , Felipe Pianco , Bruno Fanzeres , Alexandre Street , Ruiwei Jiang , Chaoyue Zhao , Miguel Heleno

Scale-free dynamics in physical and biological systems can arise from a variety of causes. Here, we explore a branching process which leads to such dynamics. We find conditions for the appearance of power laws and study quantitatively what…

Disordered Systems and Neural Networks · Physics 2009-10-31 Christoph Adami , Johan Chu

The sun provides an explosive, heavenly example of self-organized criticality. Sudden bursts of intense radiation emanate from rapid rearrangements of the magnetic field network in the corona. Avalanches are triggered by loops of flux that…

Statistical Mechanics · Physics 2009-11-10 Maya Paczuski , David Hughes

The interconnectedness of financial institutions affects instability and credit crises. To quantify systemic risk we introduce here the PD model, a dynamic model that combines credit risk techniques with a contagion mechanism on the network…

Computational Finance · Quantitative Finance 2018-04-10 Daniele Petrone , Vito Latora

Climate extremes, such as hurricanes, combined with large-scale integration of environment-sensitive renewables, could exacerbate the risk of widespread power outages. We introduce a coupled climate-energy model for cascading power outages,…

Systems and Control · Electrical Eng. & Systems 2024-07-03 Luo Xu , Ning Lin , H. Vincent Poor , Dazhi Xi , A. T. D. Perera

This paper deals with the modeling of social competition, possibly resulting in the onset of extreme conflicts. More precisely, we discuss models describing the interplay between individual competition for wealth distribution that, when…

Mathematical Physics · Physics 2014-03-17 Nicola Bellomo , Miguel A. Herrero , Andrea Tosin

This paper applies the theory of continuous phase transitions of statistical mechanics to a slider-block model. The slider-block model is chosen as a representative of systems with avalanches. Similar behavior can be observed in a…

Statistical Mechanics · Physics 2009-09-20 S. G. Abaimov

Financial crises often occur without warning, yet markets leading up to these events display increasing volatility and complex interdependencies across multiple sectors. This study proposes a novel approach to predicting market crises by…

Theoretical Economics · Economics 2025-05-19 Mahdi Kohan Sefidi

We present a network-based framework for simulating systemic risk that considers shock propagation in banking systems. In particular, the framework allows the modeller to reflect a top-down framework where a shock to one bank in the system…

Risk Management · Quantitative Finance 2018-11-13 Nadine M Walters , Conrad Beyers , Gusti van Zyl , Rolf van den Heever

A simple model economy with locally interacting producers and consumers is introduced. When driven by extremal dynamics, the model self-organizes {\em not} to an attractor state, but to an asymptote, on which the economy has a constant rate…

Statistical Mechanics · Physics 2011-04-12 Simon F. Norrelykke , Per Bak

The DebtRank algorithm has been increasingly investigated as a method to estimate the impact of shocks in financial networks, as it overcomes the limitations of the traditional default-cascade approaches. Here we formulate a dynamical…

Risk Management · Quantitative Finance 2018-11-21 Marco Bardoscia , Stefano Battiston , Fabio Caccioli , Guido Caldarelli

The Olami--Feder--Christensen earthquake model is often considered the prototype dissipative self--organized critical model. It is shown that the size distribution of events in this model results from a complex interplay of several…

Statistical Mechanics · Physics 2009-11-07 Barbara Drossel

The stability of powergrid is crucial since its disruption affects systems ranging from street lightings to hospital life-support systems. Nevertheless, large blackouts are inevitable if powergrids are in the state of self-organized…

Physics and Society · Physics 2018-10-18 Ho Fai Po , Chi Ho Yeung , An Zeng , K. Y. Michael Wong

Our paper computationally explores the extinction dynamics of an animal species effected by a sudden spike in mortality due to an extreme event. In our study, the animal species has a 2-year life cycle and is endowed with a high survival…

Quantitative Methods · Quantitative Biology 2007-05-23 Sukanto Bhattacharya , Sreepurna Malakar