Generally, physics and financial systems are not easily associated in people's minds. Yet, principles and techniques originating from physics can be very effective in describing the processes taking place on financial markets. Modeling financial systems as networks can greatly enhance our understanding of phenomena that are relevant not only to researchers in economics and other disciplines, but also to ordinary citizens, public agencies and governments. The theory of Complex Networks represents a powerful framework for studying how shocks propagate in financial systems, identifying early-warning signals of forthcoming crises, and reconstructing hidden linkages in interbank systems.
from General Physics News - Science News, Physics News, Physics, Material Sciences, Science https://ift.tt/3ixMIuo
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