Related papers: Effects of Economic Interactions on Credit Risk
In economic studies and popular media, interest rates are routinely cited as a major factor behind commodity price fluctuations. At the same time, the transmission channels are far from transparent, leading to long-running debates on the…
Vanderweele and Knol define biological interaction as an instance wherein "two exposures physically interact to bring about the outcome." A hallmark of biological interaction is that the total effect, produced when factors act together,…
The view that altruistic punishment plays an important role in supporting public cooperation among human beings and other species has been widely accepted by the public. However, the positive role of altruistic punishment in enhancing…
With negative growth in real production in many countries and debt levels which become an increasing burden on developed societies, the calls for a change in economic policy and even the monetary system become louder and increasingly…
We address the issue of the distribution of firm size. To this end we propose a model of firms in a closed, conserved economy populated with zero-intelligence agents who continuously move from one firm to another. We then analyze the size…
The aim of this paper is to quantify and manage systemic risk caused by default contagion in the interbank market. We model the market as a random directed network, where the vertices represent financial institutions and the weighted edges…
This chapter reviews key contributions of complexity science to the study of systemic risk in financial systems. The focus is on network models of financial contagion, where I explore various mechanisms of shock propagation, such as…
We present a simple model of firm rating evolution. We consider two sources of defaults: individual dynamics of economic development and Potts-like interactions between firms. We show that such a defined model leads to phase transition,…
This paper provides an overview and critical analysis on the modeling and applications of the dynamics of human crowds, where social interactions can have an important influence on the behavioral dynamics of the crowd viewed as a living,…
We show that financial correlations exhibit a non-trivial dynamic behavior. We introduce a simple phenomenological model of a multi-asset financial market, which takes into account the impact of portfolio investment on price dynamics. This…
The global financial system can be represented as a large complex network in which banks, hedge funds and other financial institutions are interconnected to each other through visible and invisible financial linkages. Recently, a lot of…
We develop a tractable macroeconomic model that captures dynamic behaviors across multiple timescales, including business cycles. The model is anchored in a dynamic capital demand framework reflecting an interactions-based process whereby…
Large Language Models (LLMs) are increasingly used in decision-making scenarios that involve risk assessment, yet their alignment with human economic rationality remains unclear. In this study, we investigate whether LLMs exhibit risk…
Accuracy of economic theories and efficiency of economic policy strictly depend on the choice of the economic variables and processes mostly liable for description of economic reality. That states the general problem of assessment of any…
The Internet plays a key role in society and is vital to economic development. Due to the pressure of competition, most technology companies, including Internet finance companies, continue to explore new markets and new business. Funding…
Memory imprints of the significance of relationships are constantly evolving. They are boosted by social interactions among people involved in relationships, and decay between such events, causing the relationships to change. Despite the…
We theorize the financial health of a company and the risk of its default. A company is financially healthy as long as its equilibrium in the financial system is maintained, which depends on the cost attributable to the probability that…
Due to the inherent safety concerns associated with traffic movement in unconstrained two-dimensional settings, it is important that pedestrians' and other modes' movements such as bicyclists are modeled as a risk-taking stochastic dynamic…
A microscopic approach to macroeconomic features is intended. A model for macroeconomic behavior under heterogeneous spatial economic conditions is reviewed. A birth-death lattice gas model taking into account the influence of an economic…
The global crisis of 2008 provoked a heightened interest among scientists to study the phenomenon, its propagation and negative consequences. The process of modelling the spread of a virus is commonly used in epidemiology. Conceptually, the…