Computational Analysis of the structural properties of Economic and Financial Networks

TL;DR

This paper surveys how network science methods are applied to analyze the structural properties of economic and financial systems, emphasizing network measures, complexity, and structures relevant to economic questions.

Contribution

It provides a comprehensive overview of network-based approaches and measures used in economic and financial network analysis, highlighting recent developments.

Findings

Network measures quantify economic system structures.

Complexity measures reveal systemic vulnerabilities.

Different network structures are relevant for specific economic applications.

Abstract

In recent years, methods from network science are gaining rapidly interest in economics and finance. A reason for this is that in a globalized world the interconnectedness among economic and financial entities are crucial to understand and networks provide a natural framework for representing and studying such systems. In this paper, we are surveying the use of networks and network-based methods for studying economy related questions. We start with a brief overview of graph theory and basic definitions. Then we discuss descriptive network measures and network complexity measures for quantifying structural properties of economic networks. Finally, we discuss different network and tree structures as relevant for applications.