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Boolean network representation of contagion dynamics during a financial crisis

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  • Caetano, Marco Antonio Leonel
  • Yoneyama, Takashi

Abstract

This work presents a network model for representation of the evolution of certain patterns of economic behavior. More specifically, after representing the agents as points in a space in which each dimension associated to a relevant economic variable, their relative “motions” that can be either stationary or discordant, are coded into a boolean network. Patterns with stationary averages indicate the maintenance of status quo, whereas discordant patterns represent aggregation of new agent into the cluster or departure from the former policies. The changing patterns can be embedded into a network representation, particularly using the concept of autocatalytic boolean networks. As a case study, the economic tendencies of the BRIC countries + Argentina were studied. Although Argentina is not included in the cluster formed by BRIC countries, it tends to follow the BRIC members because of strong commercial ties.

Suggested Citation

  • Caetano, Marco Antonio Leonel & Yoneyama, Takashi, 2015. "Boolean network representation of contagion dynamics during a financial crisis," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 417(C), pages 1-6.
    • Handle: RePEc:eee:phsmap:v:417:y:2015:i:c:p:1-6
    DOI: 10.1016/j.physa.2014.09.029
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    References listed on IDEAS

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    2. Ron Wallace, 2019. "Addressing the Malaise in Neoclassical Economics: A Call for Partial Models," Economic Thought, World Economics Association, vol. 8(1), pages 40-52, June.
    3. Zhang, Weiping & Zhuang, Xintian, 2019. "The stability of Chinese stock network and its mechanism," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 515(C), pages 748-761.
    4. Yangguang Zhu & Feng Yang & Wuyi Ye, 2018. "Financial contagion behavior analysis based on complex network approach," Annals of Operations Research, Springer, vol. 268(1), pages 93-111, September.
    5. Lahmiri, Salim & Uddin, Gazi Salah & Bekiros, Stelios, 2017. "Clustering of short and long-term co-movements in international financial and commodity markets in wavelet domain," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 486(C), pages 947-955.

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