Two Ph.D. students will present their works in progress
(1) Is financial contagion the result of agents mimicking each other ? (Souhir Masmoudi)
We propose an agent-based approach to analyze the influence of investors’ mimicking behavior on asset prices. We examine this problem by conducting experiments in an artificial asset market that contains two types of investors : Chartists agents who rely on the history of previous prices observed in financial markets and Fundamentalists agents who make decisions based on fundamental values. Agents may not be in continuous direct contact with the market and with the evolution of prices. Their anticipations are the result of their evaluation of either the success or number of followers of a forecasting strategy. The proportion of each group in this market will be based on the choice of each investor of how to update her forecasting rule. Our aim is to point out that the presence of investors who exhibit mimicking behavior might explain the phenomenon of financial contagion and more generally, contribute to a systematic explanatiton of the causes of recent financial crises.
(2) Diffusion of Resources in the Input-Output Network based on Authority-Hub Scores (Martha G. Alatriste Contreras)
The purpose of the analysis is to apply complex network measures to the input-output table of a country to elucidate the structural properties of the economic system. In particular, we use these measures to understand the diffusion of resources through sectors based on authority-hub scores. The identification of the most important sectors according to their scores provides the basis for an efficient policy design where the diffusion of local and aggregate effects is taken into account. Simulations of the distribution of the effect of the shock showed the following results : First, the magnitude of the aggregate impact depends on the score of the targeted sector ; Second, distribution of resources is different according to the sector that received the shock ; and Third, rising final demand increases, in average, final production affecting more to input suppliers of important sectors.