Related papers: May's Instability in Large Economies
This study examine the difference in the size of avalanches among industries triggered by demand shocks, which can be rephrased by control of the economy or fiscal policy, and by using the production-inventory model and observed data. We…
Social employment, which is mostly carried by firms of different types, determines the prosperity and stability of a country. As time passing, the fluctuations of firm employment can reflect the process of creating or destroying jobs.…
We study a model in which two players with opposing interests try to alter a status quo through instability-generating actions. We show that instability can be used to secure longer-term durable changes, even if it is costly to generate and…
Financial networks help firms manage risk but also enable financial shocks to spread. Despite their importance, existing models of financial networks have several limitations. Prior works often consider a static network with a simple…
Although standard economics textbooks are seldom interested in production networks, modern economies are more and more based upon suppliers/customers interactions. One can consider entire sectors of the economy as generalised supply chains.…
Standard approaches to the theory of financial markets are based on equilibrium and efficiency. Here we develop an alternative based on concepts and methods developed by biologists, in which the wealth invested in a financial strategy is…
In a manner similar to the molecular chaos that underlies the stable thermodynamics of gases, neuronal system may exhibit microscopic instability in individual neuronal dynamics while a macroscopic order of the entire population possibly…
We study an agent-based model of evolution of wealth distribution in a macro-economic system. The evolution is driven by multiplicative stochastic fluctuations governed by the law of proportionate growth and interactions between agents. We…
Modern economies evolved from simpler human exchanges into very convoluted systems. Today, a multitude of aspects can be regulated, tampered with, or left to chance; these are economic {\em degrees of freedom} which together shape the flow…
Threats on the stability of a financial system may severely affect the functioning of the entire economy, and thus considerable emphasis is placed on the analyzing the cause and effect of such threats. The financial crisis in the current…
We are investigating a paradigm of instability in coalition forming among countries, which indeed is intrinsic to any collection of individual groups or other social aggregations. Coalitions among countries are formed by the respective…
We consider a random network of nonlinear maps exhibiting a wide range of local dynamics, with the links having normally distributed interaction strengths. The stability of such a system is examined in terms of the asymptotic fraction of…
Societies experience politically stable and unstable phases along history, whereas political power is usually passed to new elite groups by these changes. Structural dynamics of the elites in a society have been proposed to be one of the…
Supply chains are the backbone of the global economy. Disruptions to them can be costly. Centrally managed supply chains invest in ensuring their resilience. Decentralized supply chains, however, must rely upon the self-interest of their…
The origin of economic crises is a key problem for economics. We present a model of long-run competitive markets to show that the multiplicity of behaviors in an economic system, over a long time scale, emerge as statistical regularities…
In the General Theory, Keynes remarked that the economy's state depends on expectations, and that these expectations can be subject to sudden swings. In this work, we develop a multiple equilibria behavioural business cycle model that can…
We develop an analytically tractable model featuring heterogeneous workers and firms, where labor markets clear through a one-to-many sorting mechanism. Firms determine both the number and composition of their employees, shaping (1) the…
Symmetry-breaking instabilities play an important role in understanding the mechanisms underlying the diversity of patterns observed in nature, such as in Turing's reaction--diffusion theory, which connects cellular signalling and transport…
Multi-stability is a widely observed phenomenon in real complex networked systems, such as technological infrastructures, ecological systems, gene regulation, transportation and more. When a system functions normally but there exists also a…
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…