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Ecosystems perspective on financial networks: diagnostic tools

Author

Listed:
  • Eduardo Viegas
  • Misako Takayasu
  • Wataru Miura
  • Koutarou Tamura
  • Takaaki Ohnishi
  • Hideki Takayasu
  • Henrik Jeldtoft Jensen

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.

Suggested Citation

  • Eduardo Viegas & Misako Takayasu & Wataru Miura & Koutarou Tamura & Takaaki Ohnishi & Hideki Takayasu & Henrik Jeldtoft Jensen, 2013. "Ecosystems perspective on financial networks: diagnostic tools," Papers 1301.5821, arXiv.org.
  • Handle: RePEc:arx:papers:1301.5821
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    File URL: http://arxiv.org/pdf/1301.5821
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    References listed on IDEAS

    as
    1. Simone Varotto, 2011. "Liquidity risk, credit risk, market risk and bank capital," International Journal of Managerial Finance, Emerald Group Publishing, vol. 7(2), pages 134-152, April.
    2. repec:wsi:ijtafx:v:03:y:2000:i:02:n:s0219024900000115 is not listed on IDEAS
    3. Simone Varotto, 2011. "Liquidity Risk, Credit Risk, Market Risk and Bank Capital," ICMA Centre Discussion Papers in Finance icma-dp2011-02, Henley Business School, Reading University.
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    Cited by:

    1. Broga, Kristijonas M. & Viegas, Eduardo & Jensen, Henrik Jeldtoft, 2016. "Model analysis of the link between interest rates and crashes," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 457(C), pages 225-238.

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