Complex networks analysis in socioeconomic models

This chapter aims at reviewing complex networks models and methods that were either developed for or applied to socioeconomic issues, and pertinent to the theme of New Economic Geography. After an introduction to the foundations of the field of complex networks, the present summary adds insights on the statistical mechanical approach, and on the most relevant computational aspects for the treatment of these systems. As the most frequently used model for interacting agent-based systems, a brief description of the statistical mechanics of the classical Ising model on regular lattices, together with recent extensions of the same model on small-world Watts-Strogatz and scale-free Albert-Barabasi complex networks is included. Other sections of the chapter are devoted to applications of complex networks to economics, finance, spreading of innovations, and regional trade and developments. The chapter also reviews results involving applications of complex networks to other relevant socioeconomic issues, including results for opinion and citation networks. Finally, some avenues for future research are introduced before summarizing the main conclusions of the chapter.Comment: 39 pages, 185 references, (not final version of) a chapter prepared for Complexity and Geographical Economics - Topics and Tools, P. Commendatore, S.S. Kayam and I. Kubin Eds. (Springer, to be published

Stochastic network formation and homophily

This is a chapter of the forthcoming Oxford Handbook on the Economics of Networks

The Financial Crisis and the Systemic Failure of Academic Economics

The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions once it started to unfold. In our view, this lack of understanding is due to a misallocation of research efforts in economics. We trace the deeper roots of this failure to the profession’s focus on models that, by design, disregard key elements driving outcomes in real-world markets. The economics profession has failed in communicating the limitations, weaknesses, and even dangers of its preferred models to the public. This state of affairs makes clear the need for a major reorientation of focus in the research economists undertake, as well as for the establishment of an ethical code that would ask economists to understand and communicate the limitations and potential misuses of their models.financial crisis, academic moral hazard, ethic responsibility of researchers

Phenomenological Models of Socio-Economic Network Dynamics

We study a general set of models of social network evolution and dynamics. The models consist of both a dynamics on the network and evolution of the network. Links are formed preferentially between 'similar' nodes, where the similarity is defined by the particular process taking place on the network. The interplay between the two processes produces phase transitions and hysteresis, as seen using numerical simulations for three specific processes. We obtain analytic results using mean field approximations, and for a particular case we derive an exact solution for the network. In common with real-world social networks, we find coexistence of high and low connectivity phases and history dependence.Comment: 11 pages, 8 figure

The Financial Crisis and the Systemic Failure of Academic Economics

The economics profession appears to have been unaware of the long build-up to the current worldwide financial crisis and to have significantly underestimated its dimensions once it started to unfold. In our view, this lack of understanding is due to a misallocation of research efforts in economics. We trace the deeper roots of this failure to the profession’s focus on models that, by design, disregard key elements driving outcomes in real-world markets. The economics profession has failed in communicating the limitations, weaknesses, and even dangers of its preferred models to the public. This state of affairs makes clear the need for a major reorientation of focus in the research economists undertake, as well as for the establishment of an ethical code that would ask economists to understand and communicate the limitations and potential misuses of their models.financial crisis; academic moral hazard; ethic responsibility of researchers

Налогообложение в реформах управления государственными финансами

Общепринятые теоретические подходы к реформированию государственной экономики, как правило, вполне пригодны для целей управления изменениями налоговых систем и их составляющих. В частности, в налоговом администрировании особенно проблемным представляется всемерное обеспечение реализации принципов горизонтальной справедливости, а также внедрение подходов, при которых для налогоплательщиков выполнение обязательств по внесению платежей становится более выгодным, чем уклонение от их уплаты. Во многих развивающихся странах неспособность правительства в связи с политическими причинами реализовать задекларированные программы часто является основным препятствием социально-экономического развития. Имплементация многих инициатив по реформированию не всегда успешна из-за отсутствия четких стратегий в государственной политике структурных изменений. Широко известны модели применения новых подходов в системах управления государственными финансами, в частности, при формировании и движении доходов, расходов и долгов. При стандартном анализе налоговых систем часто игнорируется результативность налогового администрирования, связанная с трансакционными издержками и влиянием теневой экономики: речь идет о затратах плательщиков обязательных платежей и сборов и налоговых органов, а также об иных, не подлежащих количественной оценке составляющих налогообложения, включая мотивацию нарушений законодательства. Большое значение имеет налоговое поведение, предотвращение оппортунизма, регулирование способов публичного раскрытия информации, применение системных инструментов взимания налогов. При разработке детальных планов реформирования необходимо стремиться к максимальной эффективности непрерывных циклов движения финансовых ресурсов в доходах и расходах, а также учитывать угрозы нарушения бюджетных процессов, при этом одним из главных должен быть вопрос выбора целей и приоритетов. Известны случаи, когда донорское сообщество и международные организации настаивали на необходимости внедрения определенных образцов «лучшей практики», особенно если реформирование осуществлялось при их финансовой поддержке. Отдавая должное многим позитивным примерам, следует иметь в виду, что для налоговой системы каждой страны характерны специфические черты, поэтому эффективность ее реформирования во многом будет зависеть от учета местных особенностей. В целом задача управления изменениями в системах государственных финансов усложняется внешними и внутренними факторами неопределенности, поэтому при любых обстоятельствах необходимо обеспечивать непрерывность бюджетного процесса и исполнение государством своих конституционных обязательств. Регуляторная функция экономики должна быть направлена на реализацию целей устойчивого экономического развития, соответственно, в рамках налоговой системы, как стратегического элемента госрегулирования, должны работать эффективные механизмы налогов, сборов, а также льгот и преференций во взаимосвязи с расходными статьями, трансфертами и субсидиями.Generally, standard theoretical approaches to reforming national economy are quite usable for goals of managing changes of taxation systems and their components. In particular, of most problematic issue for tax administration is all-round provision of implementing principles of horizontal justice, as well as introducing the approaches which allow the execution of commitments on making payments by taxpayers to be more profitable than evasion. In many developing countries, due to political reasons the government’s inability to implement their declared programs is frequently the main obstacle to improving the socio-economic progress. Implementation of many reform initiatives is not always successful due to absence of clear strategies in governmental policy of structural transformations. There are wide known models of applying new approaches in systems of public finance management (PFM), particularly, in regard of formation and dynamics of revenues, expenses, debts. The standard analysis of tax systems ignores, as a rule, the efficiency of tax administration connected with transaction costs and shadow economy influence: the issue is about the expenses, on one hand, for payers of obligatory payments and levies, and on the other hand, for taxation authorities, as well as about the other taxation components, non-subject to quantitative assessment, including motivation of breaching legislation. Of great significance is tax behavior, prevention of opportunism, regulation of not only tax rates and taxation basis but also of ways of public information accessibility, application of systemic toolkits of tax collection. While developing detailed plans of reforming, it is necessary to strain after maximum efficiency of continuous cycles of financial resource movements in terms of revenues and expenditures, as well as to consider challenges for interruption of the budget processes. At that, one of the main issue is, obviously, selection of targets and priorities. There are known cases, when the donor community and international organizations insist on “the best practices” introduction, especially if the reforming is carried out with their financial support. In justice to numerous positive examples, it should be borne in mind that each taxation system of every country is characterized by their specific traits, so the efficiency of its reforming will at large depend on considering local features. On the whole, the task of managing changes in the public finance systems is getting more complicated in the context of external and internal factors of uncertainty. Thus, in any circumstances it is vital to ensure continuity of the budget process, as well as execution by the state of its constitutional obligations. The regulatory potential of economy should be focused on implementing sustainable economic development goals. Accordingly, in the taxation system framework, as a strategic tool for governmental regulation, there must function efficient mechanisms of taxes and levies, as well as benefits and preferences in coordination with expenditure items, transfers and subsidies

Rational forecasts or social opinion dynamics? Identification of interaction effects in a business climate survey

This paper develops a methodology for estimating the parameters of dynamic opinion or expectation formation processes with social interactions. We study a simple stochastic framework of a collective process of opinion formation by a group of agents who face a binary decision problem. The aggregate dynamics of the individuals' decisions can be analyzed via the stochastic process governing the ensemble average of choices. Numerical approximations to the transient density for this ensemble average allow the evaluation of the likelihood function on the base of discrete observations of the social dynamics. This approach can be used to estimate the parameters of the opinion formation process from aggregate data on its average realization. Our application to a well-known business climate index provides strong indication of social interaction as an important element in respondents' assessment of the business climate. --Business climate,Business cycle forecasts,Opinion formation,Social interactions