arXiv research

Mathematical model predicts international trade and global economy dynamics.

We discuss a Pareto macro-economy (a) in a closed system with fixed total wealth and (b) in an open system with average mean wealth and compare our results to a similar analysis in a super-open system (c) with unbounded wealth. Wealth condensation takes place in the social phase for closed and open economies, while it …

Paper studies systemic robustness in financial networks using particle systems.

Develops a framework to assess systemic risk in the economy using bank-firm network data.

Study minimizes market inefficiency in systemic economies.

Analyzes new economic paradigm for non-independent consumer choices.

We study a minimalist kinetic model for economies. A system of agents with local trading rules display emergent demand behaviour. We examine the resulting wealth distribution to look for non-thermal behaviour. We compare and contrast this model with other similar models.

A phase plot of the oil economy is built using the literature data of world oil production, price, and EROEI (Energy Returned on Energy Invested). An analogy between the oil economy and the Benard convection is proposed; some methods of interpretation and forecast of the system behavior are also shown based on "phase p…

We present a model of an economy inspired by individual based model approaches in evolutionary ecology. We demonstrate that evolutionary dynamics in a space of companies interconnected through a correlated interaction matrix produces time dependencies of the total size of the economy total number of companies, companie…

Model assesses how supply chain disruptions affect financial stability.

A simple model economy with locally interacting producers and consumers is introduced. When driven by extremal dynamics, the model self-organizes {\em not} to an attractor state, but to an asymptote, on which the economy has a constant rate of deflation, is critical, and exhibits avalanches of activity with power-law d…

The green area of economy is the key of healthy living. It is necessary to convene economic and ecologic framework to establish a market attentive to drastic reduction of emissions damaging our climate and landscapes in rural areas, to the protection of biological diversity of the planet, to stop producing nuclear wast…

The optimal (`equilibrium') macroscopic properties of an economy with $N$ industries endowed with different technologies, $P$ commodities and one consumer are derived in the limit $N\to\infty$ with $n=N/P$ fixed using the replica method. When technologies are strictly inefficient, a phase transition occurs upon increas…

Economy is demanding new models, able to understand and predict the evolution of markets. To this respect, Econophysics offers models of markets as complex systems, that try to comprehend macro-, system-wide states of the economy from the interaction of many agents at micro-level. One of these models is the gas-like mo…

This paper suggests that business cycles may be a manifestation of coupled real economy and stock market dynamics and describes a mechanism that can generate economic fluctuations consistent with observed business cycles. To this end, we seek to incorporate into the macroeconomic framework a dynamic stock market model …

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 spread of a disease among a population is similar to the contagion process in e…

Based on the stochastic model proposed by Patriarca-Kaski-Chakraborti that describes the exchange of wealth between $n$ economic agents, we analyze the evolution of the corresponding economies under the assumption of a Gaussian background, modeling the exchange parameter $ε$. We demonstrate, that within Gaussian noise,…

This mathematical essay brings together ideas from Economics, Geobiodynamics and Thermodynamics. Its purpose is to obtain real models of complex evolutionary systems. More specifically, the essay defines Roegenian Economy and links Geobiodynamics and Roegenian Economy. In this context, we discuss the isomorphism betwee…

Study proposes managing COVID-19 without economy shutdowns.

Minimal model reveals power laws in financial markets.

Identifying behavior that is relatively invariant under different conditions is a challenging task in far-from-equilibrium complex systems. As an example of how the existence of a semi-invariant signature can be masked by the heterogeneity in the properties of the components comprising such systems, we consider the exc…

This study analyzes global oil trade networks to assess their efficiency and robustness.

We calculate the optimal solutions of the fully heterogeneous Von Neumann expansion problem with $N$ processes and $P$ goods in the limit $N\to\infty$. This model provides an elementary description of the growth of a production economy in the long run. The system turns from a contracting to an expanding phase as $N$ in…

Study shows how firms adapt to systemic risk during crises, revealing key players and trade volume predictors.

The paper gives picture of enrichment to economic and financial system analysis using agent-based models as a form of advanced study for financial economic data post-statistical-data analysis and micro-simulation analysis. Theoretical exploration is carried out by using comparisons of some usual financial economy syste…

We discuss the stationary states of a model economy in which $N$ heterogeneous adaptive consumers purchase commodity bundles repeatedly from $P$ sellers. The system undergoes a transition from an inefficient to an efficient state as the number of consumers increases. In the latter phase, however, price fluctuations may…

Paper introduces balanced payment systems to improve liquidity and risk management.

Corporate governance struggles to curb fraud in a globalized economy.

The notion that economies should normally be in equilibrium is by now well-established; equally well-established is that economies are almost never precisely in equilibrium. Using a very general formulation, we show that under dynamics that are second-order in time a price system can remain away from equilibrium with p…

Financial system being the place of metting capital flows (equality between saving and investment), a volatility of capital flows can destroy the robustness and good working of financial system, it means subvert financial stability. The same a weak financial system, few regulated and bad manage can exacerbate volatilit…

Novel framework analyzes economic shifts in data-poor economies.

In the current era of worldwide stock market interdependencies, the global financial village has become increasingly vulnerable to systemic collapse. The recent global financial crisis has highlighted the necessity of understanding and quantifying interdependencies among the world's economies, developing new effective …

Study proves existence of equilibrium in incomplete economies with discontinuous volatility.

Agents buy and sell services. All services are of equal quality. Buyers choose sellers at random. Monetary and fiscal policies are imposed by a central bank and a central government. Credit is supplied by a commercial banking system. Propensities to buy, sell, and lend depend on account balances, interest rates, tax ra…

Paper presents an econophysics model for mixed economies.

We review some statistical many-agent models of economic and social systems inspired by microscopic molecular models and discuss their stochastic interpretation. We apply these models to wealth exchange in economics and study how the relaxation process depends on the parameters of the system, in particular on the savin…

Expert system predicts credit card charge-offs using macroeconomic indicators.

Economy is demanding new models, able to understand and predict the evolution of markets. To this respect, Econophysics is offering models of markets as complex systems, such as the gas-like model, able to predict money distributions observed in real economies. However, this model reveals some technical hitches to expl…

Model liquidity premia using a risk-sharing economy with quadratic costs.

Agent-based model uses SAM to create realistic economic system.

Here, we present the World Trade Atlas 1870-2013, a collection of annual world trade maps in which distance combines economic size and the different dimensions that affect international trade beyond mere geography. Trade distances, which are based on a gravity model predicting the existence of significant trade channel…

In our model, private actors with interbank cash flows similar to, but nore general than (Carmona, Fouque, Sun, 2013) borrow from the outside economy at a certain interest rate, controlled by the central bank, and invest in risky assets. Each private actor aims to maximize its expected terminal logarithmic utility. The…

Study models risks for low-carbon economy in Balkan countries, focusing on shadow economy and populism.

The key characteristic of a true free market economy is that exchanges are entirely voluntary. When there is a monopoly in the creation of currency as we have in today's markets, you no longer have a true free market. Features of the current economic system such as central banking and taxation would be nonexistent in a…

Hyperinflation and price volatility in virtual economies has the potential to reduce player satisfaction and decrease developer revenue. This paper describes intuitive analytical methods for monitoring volatility and inflation in virtual economies, with worked examples on the increasingly popular multiplayer game Old S…

Economic systems, traditionally analyzed as almost independent national systems, are increasingly connected on a global scale. Only recently becoming available, the World Input-Output Database (WIOD) is one of the first efforts to construct the multi-regional input-output (MRIO) tables at the global level. By viewing t…

FinTech uses data science and AI to transform finance.

We show that world trade network datasets contain empirical evidence that the dynamics of innovation in the world economy follows indeed the concept of creative destruction, as proposed by J.A. Schumpeter more than half a century ago. National economies can be viewed as complex, evolving systems, driven by a stream of …