IDEAS home Printed from https://ideas.repec.org/a/eee/phsmap/v512y2018icp612-619.html
   My bibliography  Save this article

Interdependent networks in Economics and Finance—A Physics approach

Author

Listed:
  • Smolyak, Alex
  • Levy, Orr
  • Shekhtman, Louis
  • Havlin, Shlomo

Abstract

Over the past few decades the world underwent several major economic and financial bubbles, such as the dot-com bubble of early 2000s and the global crisis following the collapse of the US housing market in 2008. Here we review the progress made in network theory as applied to economics and highlight some important insights complex networks allow into the highly interconnected economic system. Richness of phenomena that appears once we increase our complexity beyond a single network is explored and main results, as well as future research are discussed.

Suggested Citation

  • Smolyak, Alex & Levy, Orr & Shekhtman, Louis & Havlin, Shlomo, 2018. "Interdependent networks in Economics and Finance—A Physics approach," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 512(C), pages 612-619.
    • Handle: RePEc:eee:phsmap:v:512:y:2018:i:c:p:612-619
    DOI: 10.1016/j.physa.2018.08.089
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378437118310318
    Download Restriction: Full text for ScienceDirect subscribers only. Journal offers the option of making the article available online on Science direct for a fee of $3,000
    File URL: https://libkey.io/10.1016/j.physa.2018.08.089?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. De Bandt, Olivier & Hartmann, Philipp, 2000. "Systemic risk: A survey," Working Paper Series 35, European Central Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liu, Xiao Fan & Chen, Hou-Jin & Sun, Wu-Jiu, 2021. "Adaptive topological coevolution of interdependent networks: Scientific collaboration-citation networks as an example," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 564(C).
    2. Xu, Runjie & Mi, Chuanmin & Mierzwiak, Rafał & Meng, Runyu, 2020. "Complex network construction of Internet finance risk," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 540(C).
    3. Tacchella, Andrea & Zaccaria, Andrea & Miccheli, Marco & Pietronero, Luciano, 2023. "Relatedness in the era of machine learning," Chaos, Solitons & Fractals, Elsevier, vol. 176(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ethan B Kapstein, 2006. "Architects of stability? International cooperation among financial supervisors," BIS Working Papers 199, Bank for International Settlements.
    2. Claeys, Peter & Vašíček, Bořek, 2014. "Measuring bilateral spillover and testing contagion on sovereign bond markets in Europe," Journal of Banking & Finance, Elsevier, vol. 46(C), pages 151-165.
    3. Armstrong, Christopher & Nicoletti, Allison & Zhou, Frank S., 2022. "Executive stock options and systemic risk," Journal of Financial Economics, Elsevier, vol. 146(1), pages 256-276.
    4. Danielsson, Jon & Jorgensen, Bjorn N. & de Vries, Casper G., 2002. "Incentives for effective risk management," Journal of Banking & Finance, Elsevier, vol. 26(7), pages 1407-1425, July.
    5. Paul Goldsmith-Pinkham & Tanju Yorulmazer, 2010. "Liquidity, Bank Runs, and Bailouts: Spillover Effects During the Northern Rock Episode," Journal of Financial Services Research, Springer;Western Finance Association, vol. 37(2), pages 83-98, June.
    6. Welfens, Paul J. J., 2009. "The Transatlantic Banking Crisis: Lessons and EU Reforms," IZA Policy Papers 2, Institute of Labor Economics (IZA).
    7. Amara, Tijani & Mabrouki, Mohamed, 2019. "Les normes prudentielles : étude d’impact sur la solvabilité bancaire [Prudential standards: impact study on bank solvency]," MPRA Paper 95455, University Library of Munich, Germany.
    8. Eboli, Mario, 2013. "A flow network analysis of direct balance-sheet contagion in financial networks," Kiel Working Papers 1862, Kiel Institute for the World Economy (IfW Kiel).
    9. repec:zbw:bofrdp:2004_004 is not listed on IDEAS
    10. Arnaud Z. Dragicevic, 2019. "Market Coordination Under Non-Equilibrium Dynamics," Networks and Spatial Economics, Springer, vol. 19(3), pages 697-715, September.
    11. Song Han & Dan Li, 2010. "The fragility of discretionary liquidity provision - lessons from the collapse of the auction rate securities market," Finance and Economics Discussion Series 2010-50, Board of Governors of the Federal Reserve System (U.S.).
    12. John Kambhu & Til Schuermann & Kevin J. Stiroh, 2007. "Hedge funds, financial intermediation, and systemic risk," Economic Policy Review, Federal Reserve Bank of New York, vol. 13(Dec), pages 1-18.
    13. Gianni De Nicolo & Myron L. Kwast, 2001. "Systemic risk and financial consolidation: are they related?," Finance and Economics Discussion Series 2001-33, Board of Governors of the Federal Reserve System (U.S.).
    14. Christian Eckert, 2020. "Risk and risk management of spillover effects: Evidence from the literature," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 23(1), pages 75-104, March.
    15. Ebrahimi Kahou, Mahdi & Lehar, Alfred, 2017. "Macroprudential policy: A review," Journal of Financial Stability, Elsevier, vol. 29(C), pages 92-105.
    16. Pesaran M.H. & Schuermann T. & Weiner S.M., 2004. "Modeling Regional Interdependencies Using a Global Error-Correcting Macroeconometric Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 22, pages 129-162, April.
    17. Moore, Kyle & Zhou, Chen, 2014. "The determinants of systemic importance," LSE Research Online Documents on Economics 59289, London School of Economics and Political Science, LSE Library.
    18. Acharya, Viral & Yorulmazer, Tanju, 2003. "Information Contagion and Inter-Bank Correlation in a Theory of Systemic Risk," CEPR Discussion Papers 3743, C.E.P.R. Discussion Papers.
    19. Yoichi Ueno & Naohiko Baba, 2006. "Default Intensity and Expected Recovery of Japanese Banks and "Government": New Evidence from the CDS Market," Bank of Japan Working Paper Series 06-E-4, Bank of Japan.
    20. Juan M. Londono & Mary Tian, 2014. "Bank Interventions and Options-based Systemic Risk: Evidence from the Global and Euro-area Crisis," International Finance Discussion Papers 1117, Board of Governors of the Federal Reserve System (U.S.).
    21. Małgorzata Tarczynska-Luniewska & Iwona Bak & Uma Shankar Singh & Guru Ashish Singh, 2022. "Economic Crisis Impact Assessment and Risk Exposure Evaluation of Selected Energy Sector Companies from Bombay Stock Exchange," Energies, MDPI, vol. 15(22), pages 1-25, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:phsmap:v:512:y:2018:i:c:p:612-619. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.