Network science: a useful tool in economics and finance
Kenett, Dror Y.; Havlin, Shlomo
- The increasing frequency and scope of financial crises has made global$\backslash$nfinancial stability one of the major concerns of economic policy and decision$\backslash$nmakers. Under this highly complex environment, supervision of the financial system$\backslash$nhas to be thought of as a systemic task, focusing not only on the strength of the$\backslash$ninstitutions but also on the interdependent relations among them, unraveling the$\backslash$nstructure and dynamic of the system as a whole. In recent years, network science has$\backslash$nemerged as a leading tool for the investigation of complex systems. Here we review$\backslash$nseveral applications of network science in finance and economics, and discuss existing$\backslash$nchallenges and future directions which will substantiate network science as a$\backslash$nkey tool for financial academics, practitioners, and policy and decision makers.
- Research areas:
- Type of Publication:
- Contagion; Financial networks; Financial stability; Interdependence; Network science; Percolation theory
- Mind and Society