When complexity meets finance: A contribution to the study of the macroeconomic effects of complex financial systems
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Títol
When complexity meets finance: A contribution to the study of the macroeconomic effects of complex financial systemsData de publicació
2020Editor
ElsevierISSN
0048-7333; 1873-7625Cita bibliogràfica
BOTTA, Alberto; CAVERZASI, Eugenio; RUSSO, Alberto. When complexity meets finance: a contribution to the study of the macroeconomic effects of complex financial systems. Research Policy, 2020, p. 103990Tipus de document
info:eu-repo/semantics/articleVersió de l'editorial
https://www.sciencedirect.com/science/article/abs/pii/S0048733320300706#!Versió
info:eu-repo/semantics/submittedVersionParaules clau / Matèries
Resum
In the last decade, complexity economics has emerged as a powerful approach to the understanding of
the most relevant factors influencing economic development. The concept of economic complexity has
been applied ... [+]
In the last decade, complexity economics has emerged as a powerful approach to the understanding of
the most relevant factors influencing economic development. The concept of economic complexity has
been applied to the study of different economic issues such as economic growth, technological change
and inequality. With this work we aim at extending the application of this concept to the study of the
financial side of the economy, and, in particular, of the macroeconomic effects of rising financial
complexity. In this paper, we present an agent-based model integrating an increasingly complex
financial sector with a real side of the economy populated, among other sectors, by heterogeneous
households. We test the systemic impact that the increasing complexity of both the financial system and
the financial products it manufactures bear on economic growth, macroeconomic stability and
inequality. We find mixed results with respect to the positive economic implications the existing
literature ascribes to products complexity and deepening production capabilities. Despite higher
financial complexity may lead to faster growth, our model suggests that this comes at the cost of
heightened financial fragility, a more crisis-prone economic system, and increasing levels of income and
wealth inequality. According to these findings, and consistently with pioneering insights from Minsky,
we claim that rising complexity does not always entail positive consequences for the well-being of the
economy. This is particularly true when it comes to financial innovations and financial complexity. [-]
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Research Policy, 2020, p. 103990Drets d'accés
http://rightsstatements.org/vocab/CNE/1.0/
info:eu-repo/semantics/openAccess
info:eu-repo/semantics/openAccess
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