Ecosystems perspective on financial networks: diagnostic tools
Risk Management
2013-01-25 v1 Adaptation and Self-Organizing Systems
General Finance
Abstract
The economical world consists of a highly interconnected and interdependent network of firms. Here we develop temporal and structural network tools to analyze the state of the economy. Our analysis indicates that a strong clustering can be a warning sign. Reduction in diversity, which was an essential aspect of the dynamics surrounding the crash in 2008, is seen as a key emergent feature arising naturally from the evolutionary and adaptive dynamics inherent to the financial markets. Similarly, collusion amongst construction firms in a number of regions in Japan in the 2000s can be identified with the formation of clusters of anomalous highly connected companies.
Cite
@article{arxiv.1301.5821,
title = {Ecosystems perspective on financial networks: diagnostic tools},
author = {Eduardo Viegas and Misako Takayasu and Wataru Miura and Koutarou Tamura and Takaaki Ohnishi and Hideki Takayasu and Henrik Jeldtoft Jensen},
journal= {arXiv preprint arXiv:1301.5821},
year = {2013}
}
Comments
21 pages, 5 figures and one appendix