Inside Money, Procyclical Leverage, and Banking Catastrophes

We explore a model of the interaction between banks and outside investors in which the ability of banks to issue inside money (short-term liabilities believed to be convertible into currency at par) can generate a collapse in asset prices and widespread bank insolvency. The banks and investors share a common belief about the future value of certain long-term assets, but they have different objective functions; changes to this common belief result in portfolio adjustments and trade. Positive belief shocks induce banks to buy risky assets from investors, and the banks finance those purchases by issuing new short-term liabilities. Negative belief shocks induce banks to sell assets in order to reduce their chance of insolvency to a tolerably low level, and they supply more assets at lower prices, which can result in multiple market-clearing prices. A sufficiently severe negative shock causes the set of equilibrium prices to contract (in a manner given by a cusp catastrophe), causing prices to plummet discontinuously and banks to become insolvent. Successive positive and negative shocks of equal magnitude do not cancel; rather, a banking catastrophe can occur even if beliefs simply return to their initial state. Capital requirements can prevent crises by curtailing the expansion of balance sheets when beliefs become more optimistic, but they can also force larger price declines. Emergency asset price supports can be understood as attempts by a central bank to coordinate expectations on an equilibrium with solvency.Comment: 31 pages, 10 figure

The "New" Science of Networks

In recent years, the analysis and modeling of networks, and also networked dynamical systems, have been the subject of considerable interdisciplinary interest, yielding several hundred papers in physics, mathematics, computer science, biology, economics, and sociology journals (Newman 2003c), as well as a number of books (Barabasi 2002, Buchanan 2002,Watts 2003). Here I review the major findings of this emerging field and discuss briefly their relationship with previous work in the social and mathematical sciences

The diminishing state of shared reality on US television news

The potential for a large, diverse population to coexist peacefully is thought to depend on the existence of a ``shared reality:'' a public sphere in which participants are exposed to similar facts about similar topics. A generation ago, broadcast television news was widely considered to serve this function; however, since the rise of cable news in the 1990s, critics and scholars have worried that the corresponding fragmentation and segregation of audiences along partisan lines has caused this shared reality to be lost. Here we examine this concern using a unique combination of data sets tracking the production (since 2012) and consumption (since 2016) of television news content on the three largest cable and broadcast networks respectively. With regard to production, we find strong evidence for the ``loss of shared reality hypothesis:'' while broadcast continues to cover similar topics with similar language, cable news networks have become increasingly distinct, both from broadcast news and each other, diverging both in terms of content and language. With regard to consumption, we find more mixed evidence: while broadcast news has indeed declined in popularity, it remains the dominant source of news for roughly 50\% more Americans than does cable; moreover, its decline, while somewhat attributable to cable, appears driven more by a shift away from news consumption altogether than a growth in cable consumption. We conclude that shared reality on US television news is indeed diminishing, but is more robust than previously thought and is declining for somewhat different reasons

Pre-registration for Predictive Modeling

Amid rising concerns of reproducibility and generalizability in predictive modeling, we explore the possibility and potential benefits of introducing pre-registration to the field. Despite notable advancements in predictive modeling, spanning core machine learning tasks to various scientific applications, challenges such as overlooked contextual factors, data-dependent decision-making, and unintentional re-use of test data have raised questions about the integrity of results. To address these issues, we propose adapting pre-registration practices from explanatory modeling to predictive modeling. We discuss current best practices in predictive modeling and their limitations, introduce a lightweight pre-registration template, and present a qualitative study with machine learning researchers to gain insight into the effectiveness of pre-registration in preventing biased estimates and promoting more reliable research outcomes. We conclude by exploring the scope of problems that pre-registration can address in predictive modeling and acknowledging its limitations within this context

Plasma Magnetosphere Formation Around Oscillating Magnetized Neutron Stars

The notion of death line of rotating pulsars is applied to model of oscillating neutron stars. It is shown that the magnetosphere of typical non-rotating oscillating stars may not contain secondary plasma to support the generation of radio emission in the region of open field lines of plasma magnetosphere.Comment: Accepted for publication in Astrophysics & Space Scienc

Evaluating the scale, growth, and origins of right-wing echo chambers on YouTube

Although it is understudied relative to other social media platforms, YouTube is arguably the largest and most engaging online media consumption platform in the world. Recently, YouTube's outsize influence has sparked concerns that its recommendation algorithm systematically directs users to radical right-wing content. Here we investigate these concerns with large scale longitudinal data of individuals' browsing behavior spanning January 2016 through December 2019. Consistent with previous work, we find that political news content accounts for a relatively small fraction (11%) of consumption on YouTube, and is dominated by mainstream and largely centrist sources. However, we also find evidence for a small but growing "echo chamber" of far-right content consumption. Users in this community show higher engagement and greater "stickiness" than users who consume any other category of content. Moreover, YouTube accounts for an increasing fraction of these users' overall online news consumption. Finally, while the size, intensity, and growth of this echo chamber present real concerns, we find no evidence that they are caused by YouTube recommendations. Rather, consumption of radical content on YouTube appears to reflect broader patterns of news consumption across the web. Our results emphasize the importance of measuring consumption directly rather than inferring it from recommendations.Comment: 29 pages, 21 figures, 15 table