IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2507.05287.html
   My bibliography  Save this paper

Increasing Systemic Resilience to Socioeconomic Challenges: Modeling the Dynamics of Liquidity Flows and Systemic Risks Using Navier-Stokes Equations

Author

Listed:
  • Davit Gondauri

Abstract

Modern economic systems face unprecedented socioeconomic challenges, making systemic resilience and effective liquidity flow management essential. Traditional models such as CAPM, VaR, and GARCH often fail to reflect real market fluctuations and extreme events. This study develops and validates an innovative mathematical model based on the Navier-Stokes equations, aimed at the quantitative assessment, forecasting, and simulation of liquidity flows and systemic risks. The model incorporates 13 macroeconomic and financial parameters, including liquidity velocity, market pressure, internal stress, stochastic fluctuations, and risk premiums, all based on real data and formally included in the modified equation. The methodology employs econometric testing, Fourier analysis, stochastic simulation, and AI-based calibration to enable dynamic testing and forecasting. Simulation-based sensitivity analysis evaluates the impact of parameter changes on financial balance. The model is empirically tested using Georgian macroeconomic and financial data from 2010-2024, including GDP, inflation, the Gini index, CDS spreads, and LCR metrics. Results show that the model effectively describes liquidity dynamics, systemic risk, and extreme scenarios, while also offering a robust framework for multifactorial analysis, crisis prediction, and countercyclical policy planning.

Suggested Citation

  • Davit Gondauri, 2025. "Increasing Systemic Resilience to Socioeconomic Challenges: Modeling the Dynamics of Liquidity Flows and Systemic Risks Using Navier-Stokes Equations," Papers 2507.05287, arXiv.org.
  • Handle: RePEc:arx:papers:2507.05287
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2507.05287
    File Function: Latest version
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    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:arx:papers:2507.05287. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    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.