Related papers: Optimizing Economic Complexity
Economies are complex man-made systems where organisms and markets interact according to motivations and principles not entirely understood yet. The increasing dissatisfaction with the postulates of traditional economics i.e. perfectly…
Energy and pollution are urging problems of the 21th century. By gradually changing the actual power grid system, smart grid may evolve into different systems by means of size, elements and strategies, but its fundamental requirements and…
We define a novel quantitative strategy inspired by the ecological notion of nestedness to single out the scale at which innovation complexity emerges from the aggregation of specialized building blocks. Our analysis not only suggests that…
We analyze different re-ranking algorithms for diversification and show that majority of them are based on maximizing submodular/modular functions from the class of parameterized concave/linear over modular functions. We study the…
To achieve inclusive green growth, countries need to consider a multiplicity of economic, social, and environmental factors. These are often captured by metrics of economic complexity derived from the geography of trade, thus missing key…
Estimating the capabilities, or inputs of production, that drive and constrain the economic development of urban areas has remained a challenging goal. We posit that capabilities are instantiated in the complexity and sophistication of…
Sparsity or complexity? In modern high-dimensional asset pricing, these are often viewed as competing principles: richer feature spaces appear to favor complexity, while economic intuition has long favored parsimony. We show that this…
Graphs are a natural representation for systems based on relations between connected entities. Combinatorial optimization problems, which arise when considering an objective function related to a process of interest on discrete structures,…
The organization of interactions in complex systems can be described by networks connecting different units. These graphs are useful representations of the local and global complexity of the underlying systems. The origin of their…
We propose a definition of diversification as a binary relationship between financial portfolios. According to it, a convex linear combination of several risk positions with some weights is considered to be less risky than the probabilistic…
Complexity is an interdisciplinary concept which, first of all, addresses the question of how order emerges out of randomness. For many reasons matrices provide a very practical and powerful tool in approaching and quantifying the related…
Economic growth is often associated with diversification of economic activities. Making a product in a country is dependent on having, and acquiring, the capabilities needed to make the product, making the process path-dependent. We derive…
Optimization problems are ubiquitous in our societies and are present in almost every segment of the economy. Most of these optimization problems are NP-hard and computationally demanding, often requiring approximate solutions for…
Graph-based representations of images have recently acquired an important role for classification purposes within the context of machine learning approaches. The underlying idea is to consider that relevant information of an image is…
In this work, we deal with the problem of computing a comprehensive front of efficient solutions in multi-objective portfolio optimization problems in presence of sparsity constraints. We start the discussion pointing out some weaknesses of…
While optimal taxation theory provides clear prescriptions for tax design, translating these insights into actual tax codes remains difficult. Existing work largely offers theoretical characterizations of optimal systems, while practical…
This paper investigates the problem of ensembling multiple strategies for sequential portfolios to outperform individual strategies in terms of long-term wealth. Due to the uncertainty of strategies' performances in the future market, which…
Existing approaches to solving combinatorial optimization problems on graphs suffer from the need to engineer each problem algorithmically, with practical problems recurring in many instances. The practical side of theoretical computer…
The paper argues that attracting more economists and adopting a more-precise definition of dynamic complexity might help econophysics acquire more attention in the economics community and bring new lymph to economic research. It may be…
In this paper, we introduce a graph matching method that can account for constraints of arbitrary order, with arbitrary potential functions. Unlike previous decomposition approaches that rely on the graph structures, we introduce a…