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Financial networks and contagion

Carola Conces Binder, Ph.D. candidate, economics | November 12, 2013

Financial Networks and Contagion,” a recent paper by Matthew Elliott, Benjamin Golub, and Matthew Jackson, uses network theory to study how financial interdependencies among governments, central banks, investment banks, and other institutions can lead to cascading defaults and failures. While the model is quite technical, the main theoretical findings are fairly intuitive. They define two key … Continue reading »