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The conditions that can lead to the exploitative depletion of a shared resource, i.e, the tragedy of the commons, can be reformulated as a game of prisoner's dilemma: while preserving the common resource is in the best interest of the…
We propose a consumption-investment decision model where past consumption peak $h$ plays a crucial role. There are two important consumption levels: the lowest constrained level and a reference level, at which the risk aversion in terms of…
Demographic and health indicators may exhibit short or large short-term shocks; for example, armed conflicts, epidemics, or famines may cause shocks in period measures of life expectancy. Statistical models for estimating historical trends…
We study cross-country GDP losses due to financial crises in terms of frequency (number of loss events per period) and severity (loss per occurrence). We perform the Loss Distribution Approach (LDA) to estimate a multi-country aggregate GDP…
Foundation models are increasingly trained on synthetic data generated by prior model iterations rather than exclusively on real data. This self-consuming training paradigm can lead to model collapse, divergence, or bias amplification.…
We use a Cooperative Decision Making (CDM) model to study the effect of committed minorities on group behavior in time of crisis. The CDM model has been shown to generate consensus through a phase-transition process that at criticality…
We introduce the logistic model of consumption growth, which captures a negative feedback loop preventing an unlimited growth of consumption due to finite biophysical resources of our planet. This simple dynamic model allows for derivation…
Spontaneous collapse models aim to solve the long-standing measurement problem in quantum mechanics by modifying the theory's dynamics to include objective wave function collapses. These collapses occur randomly in space, bridging the gap…
Solomon and Golo [1] have recently proposed an autocatalytic (self-reinforcing) feedback model which couples a macroscopic system parameter (the interest rate), a microscopic parameter that measures the distribution of the states of the…
A consumer Behaviour model is considered in the context of a network of interacting individuals in an energy market. We propose and analyse a simple dynamical model of an ensemble of coupled active elements mimicking consumers' Behaviour,…
Modern macroeconomic models, particularly those grounded in Rational Expectation Dynamic Stochastic General Equilibrium (DSGE), operate under the assumption of fully rational decision-making. This paper examines the impact of behavioral…
I devise a novel approach to evaluate the effectiveness of fiscal policy in the short run with multi-category treatment effects and inverse probability weighting based on the potential outcome framework. This study's main contribution to…
Consumption is a primary source of economic growth and key indicator of poverty. The establishment of community banks can provide credit resources, unlocking household consumption potential and playing a crucial role in economic…
We present a simple model for describing the dynamics of the interaction between a homogeneous population or society, and the natural resources and reserves that the society needs for its survival. The model is formulated in terms of…
We compare two models of corporate default by calculating the Jeffreys-Kullback-Leibler divergence between their predicted default probabilities when asset correlations are either high or low. Our main results show that the divergence…
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…
Why are human societies unstable? Theories based on the observation of recurring patterns in historical data indicate that economic inequality, as well as social factors are key drivers. So far, models of this phenomenon are more…
Predicting panic is of critical importance in many areas of human and animal behavior, notably in the context of economics. The recent financial crisis is a case in point. Panic may be due to a specific external threat, or self-generated…
This study investigates the extent to which local public equity indices can statistically hedge real purchasing power loss during compounded structural macro-financial collapses in emerging markets. We employ a non-linear multiplicative…
The notion that an independent central bank reduces a country's inflation is a controversial hypothesis. To date, it has not been possible to satisfactorily answer this question because the complex macroeconomic structure that gives rise to…