Detecting Policy Preferences and Dynamics in the UN General Debate with Neural Word Embeddings

Foreign policy analysis has been struggling to find ways to measure policy preferences and paradigm shifts in international political systems. This paper presents a novel, potential solution to this challenge, through the application of a neural word embedding (Word2vec) model on a dataset featuring speeches by heads of state or government in the United Nations General Debate. The paper provides three key contributions based on the output of the Word2vec model. First, it presents a set of policy attention indices, synthesizing the semantic proximity of political speeches to specific policy themes. Second, it introduces country-specific semantic centrality indices, based on topological analyses of countries' semantic positions with respect to each other. Third, it tests the hypothesis that there exists a statistical relation between the semantic content of political speeches and UN voting behavior, falsifying it and suggesting that political speeches contain information of different nature then the one behind voting outcomes. The paper concludes with a discussion of the practical use of its results and consequences for foreign policy analysis, public accountability, and transparency

Topology Analysis of International Networks Based on Debates in the United Nations

In complex, high dimensional and unstructured data it is often difficult to extract meaningful patterns. This is especially the case when dealing with textual data. Recent studies in machine learning, information theory and network science have developed several novel instruments to extract the semantics of unstructured data, and harness it to build a network of relations. Such approaches serve as an efficient tool for dimensionality reduction and pattern detection. This paper applies semantic network science to extract ideological proximity in the international arena, by focusing on the data from General Debates in the UN General Assembly on the topics of high salience to international community. UN General Debate corpus (UNGDC) covers all high-level debates in the UN General Assembly from 1970 to 2014, covering all UN member states. The research proceeds in three main steps. First, Latent Dirichlet Allocation (LDA) is used to extract the topics of the UN speeches, and therefore semantic information. Each country is then assigned a vector specifying the exposure to each of the topics identified. This intermediate output is then used in to construct a network of countries based on information theoretical metrics where the links capture similar vectorial patterns in the topic distributions. Topology of the networks is then analyzed through network properties like density, path length and clustering. Finally, we identify specific topological features of our networks using the map equation framework to detect communities in our networks of countries

Leveraging the network: A stress-test framework based on DebtRank

We develop a novel stress-test framework to monitor systemic risk in financial systems. The modular structure of the framework allows to accommodate for a variety of shock scenarios, methods to estimate interbank exposures and mechanisms of distress propagation. The main features are as follows. First, the framework allows to estimate and disentangle not only first-round effects (i.e. shock on external assets) and second-round effects (i.e. distress induced in the interbank network), but also third-round effects induced by possible fire sales. Second, it allows to monitor at the same time the impact of shocks on individual or groups of financial institutions as well as their vulnerability to shocks on counterparties or certain asset classes. Third, it includes estimates for loss distributions, thus combining network effects with familiar risk measures such as VaR and CVaR. Fourth, in order to perform robustness analyses and cope with incomplete data, the framework features a module for the generation of sets of networks of interbank exposures that are coherent with the total lending and borrowing of each bank. As an illustration, we carry out a stress-test exercise on a dataset of listed European banks over the years 2008-2013. We find that second-round and third-round effects dominate first-round effects, therefore suggesting that most current stress-test frameworks might lead to a severe underestimation of systemic risk

Complex Politics: A Quantitative Semantic and Topological Analysis of UK House of Commons Debates

This study is a first, exploratory attempt to use quantitative semantics techniques and topological analysis to analyze systemic patterns arising in a complex political system. In particular, we use a rich data set covering all speeches and debates in the UK House of Commons between 1975 and 2014. By the use of dynamic topic modeling (DTM) and topological data analysis (TDA) we show that both members and parties feature specific roles within the system, consistent over time, and extract global patterns indicating levels of political cohesion. Our results provide a wide array of novel hypotheses about the complex dynamics of political systems, with valuable policy applications

DebtRank and the network of leverage

The interconnectedness of the financial system is one of the main factors contributing to systemic risk. The financial crisis has shown how the network of intrafinancial exposures may, in times of systemic distress, amplify initially small shocks. In this work, the authors build on the DebtRank methodology by introducing the notion of a network of leverage and propose a two-round stress test exercise. In the first round, a shock hits banks’ external assets; in the second round, these initial losses reverberate in the network of interbank exposures because of the devaluation of interbank obligations. Losses in the second round result from a multiplicative effect between external and interbank leverage. The authors then apply the stress test to the largest EU banks for the years 2008–2013. They find that second-round losses are at least as large as first-round losses; neglecting these effects could therefore lead to a severe underestimation of systemic risk

Leveraging the network: a stress-test framework based on DebtRank

We develop a novel stress-test framework to monitor systemic risk in financial systems. The modular structure of the framework allows to accommodate for a variety of shock scenarios, methods to estimate interbank exposures and mechanisms of distress propagation. The main features are as follows. First, the framework allows to estimate and disentangle not only first-round effects (i.e. shock on external assets) and second-round effects (i.e. distress induced in the interbank network), but also third-round effects induced by possible fire sales. Second, it allows to monitor at the same time the impact of shocks on individual or groups of financial institutions as well as their vulnerability to shocks on counterparties or certain asset classes. Third, it includes estimates for loss distributions, thus combining network effects with familiar risk measures such as VaR and CVaR. Fourth, in order to perform robustness analyses and cope with incomplete data, the framework features a module for the generation of sets of networks of interbank exposures that are coherent with the total lending and borrowing of each bank. As an illustration, we carry out a stress-test exercise on a dataset of listed European banks over the years 2008-2013. We find that second-round and third-round effects dominate first-round effects, therefore suggesting that most current stress-test frameworks might lead to a severe underestimation of systemic risk