Global cascades in the financial network

 

KWANG-IL GOH

KOREA UNIVERSITY

 

Recent global financial crisis is a striking example of emergent dynamics arising from intricate interdependency between countries and other economic institutions. Motivated by it, here we study the cascading failure dynamics on a financial network, the network of countries based on trading relations. We examine the characteristics of global avalanche dynamics and individual country's role in the cascading dynamics. Emphasis is given to implications of trading network structure to stability of the financial system.