vendredi 27 mars 2015
Haldane: On microscopes and telescopes
Posted on 01:22 by nice news
At least since the financial crisis, there has been increasing interest in using complexity theory to make sense of the dynamics of economic and financial systems (Newman (2011), Arthur (2014)). Particular attention has focussed on the use of network theory to understand the non-linear behaviour of the financial system in situations of stress (Gai and Kapadia (2011), Haldane and May (2011), Gai, Haldane and Kapadia (2011)). The language of complexity theory – tipping points, feedback, discontinuities, fat tails – has entered the financial and regulatory lexicon.
Some progress has also been made in using these models to help design and calibrate post-crisis regulatory policy. As one example, epidemiological models have been used to understand and calibrate regulatory capital standards for the largest, most interconnected banks – the so-called “super-spreaders” (Craig et al (2014)). They have also been used to understand the impact of central clearing of derivatives contracts, instabilities in payments systems and policies which set minimum
Some progress has also been made in using these models to help design and calibrate post-crisis regulatory policy. As one example, epidemiological models have been used to understand and calibrate regulatory capital standards for the largest, most interconnected banks – the so-called “super-spreaders” (Craig et al (2014)). They have also been used to understand the impact of central clearing of derivatives contracts, instabilities in payments systems and policies which set minimum
Haldane: On microscopes and telescopes
Categories: Haldane: On microscopes and telescopes
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