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Economic Networks In and Out of Equilibrium

Squartini, Tiziano and Garlaschelli, Diego Economic Networks In and Out of Equilibrium. In: International Conference on Signal-Image Technology Internet-Based Systems (SITIS), 2013, 2-5 December, 2013, Kyoto pp. 530-537. (2013)

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Abstract

Economic and financial networks play a crucial role in various important processes, including economic integration, globalization, and financial crises. Of particular interest is understanding whether the temporal evolution of a real economic network is in a (quasi-)stationary equilibrium, i.e. characterized by smooth structural changes rather than abrupt transitions. Smooth changes in quasi-equilibrium networks can be generally controlled for, and largely predicted, while this is generally not possible for abrupt transitions in non-stationary networks. Here we study whether real economic networks are in or out of equilibrium by checking their consistency with quasi-equilibrium maximum-entropy ensembles of graphs. As illustrative examples, we consider the International Trade Network (ITN) and the Dutch Interbank Network (DIN). We show that, despite the globalization process, the ITN is an almost perfect example of quasi-equilibrium network, while the DIN is clearly an out-of-equilibrium network undergoing major structural changes and displaying non-stationary dynamics. Among the out-of-equilibrium properties of the DIN, we find striking early-warning signals of the interbank crisis of 2008.

Item Type: Conference or Workshop Item (Paper)
Identification Number: 10.1109/SITIS.2013.89
Uncontrolled Keywords: Economic cycles, Financial management, Globalisation, Maximum entropy methods, International Trade Network, Early-warning signals
Subjects: H Social Sciences > HB Economic Theory
Q Science > QA Mathematics
Research Area: Economics and Institutional Change
Depositing User: Caterina Tangheroni
Date Deposited: 05 Nov 2015 13:05
Last Modified: 05 Nov 2015 13:05
URI: http://eprints.imtlucca.it/id/eprint/2822

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