Related papers: Technological Innovation and Bursting Bubbles
The aim of this work is to explore the possible types of phenomena that simple macroeconomic Agent-Based models (ABM) can reproduce. We propose a methodology, inspired by statistical physics, that characterizes a model through its 'phase…
The implications of technological innovation for sustainability are becoming increasingly complex with information technology moving machines from being mere tools for production or objects of consumption to playing a role in economic…
This paper explores the interplay between transfer policies, R\&D, corruption, and economic development using a general equilibrium model with heterogeneous agents and a government. The government collects taxes, redistributes fiscal…
A detailed empirical analysis of the productivity of non financial firms across several countries and years shows that productivity follows a non-Gaussian distribution with power law tails. We demonstrate that these empirical findings can…
Machine learning algorithms can now outperform classic economic models in predicting quantities ranging from bargaining outcomes, to choice under uncertainty, to an individual's future jobs and wages. Yet this predictive accuracy comes at a…
We quantify the amount of information filtered by different hierarchical clustering methods on correlations between stock returns comparing it with the underlying industrial activity structure. Specifically, we apply, for the first time to…
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…
We study how idiosyncratic firm-level shocks generate aggregate volatility and tail risk when they propagate through a production network under overlapping adjustment: new productivity draws arrive before the economy reaches the static…
The emergence of the modern gig economy introduces a new set of employment considerations for firms and laborers that include various trade-offs. With a game-theoretical approach, we examine the influences of technology, policy and markets…
Imitative and contrarian behaviors are the two typical opposite attitudes of investors in stock markets. We introduce a simple model to investigate their interplay in a stock market where agents can take only two states, bullish or bearish.…
This paper studies the economic role of persistent dispersion in allocations across agents. We develop a tractable model in which firms allocate resources under imperfect information and behavioral updating, generating sustained…
Quasi-equilibrium models for aggregate variables are widely-used throughout finance and economics. The validity of such models depends crucially upon assuming that the systems' participants behave both independently and in a Markovian…
In this paper we seek to demonstrate the predictability of stock market returns and explain the nature of this return predictability. To this end, we introduce investors with different investment horizons into the news-driven, analytic,…
This study proposes the concept of disruptive firms: they are firms with market leadership that deliberate introduce new and improved generations of durable goods that destroy, directly or indirectly, similar products present in markets in…
Arthur [1,2] provided a model to explain the circumstances that lead to technological lock-in into a specific trajectory. We contribute substantially to this area of research by investigating the circumstances under which technological…
Economic growth depends on capital investments and on investments in education and innovation. The model introduced here will specifiy aggregate output as determined by aggregate supply of capital and education investment. After formulating…
We consider a banking network represented by a system of stochastic differential equations coupled by their drift. We assume a core-periphery structure, and that the banks in the core hold a bubbly asset. The banks in the periphery have not…
As a typical representation of complex networks studied relatively thoroughly, financial market presents some special details, such as its nonconservation and opinions spreading. In this model, agents congregate to form some clusters, which…
Central to the official "green growth" discourse is the conjecture that absolute decoupling can be achieved with certain market instruments. This paper evaluates this claim focusing on the role of technology, while changes in GDP…
This paper proposes a new measure of tail risk spillover. The empirical application provides evidence of significant volatility and tail risk spillovers from the financial sector to many real economy sectors in the U.S. economy in the…