Boolean network representation of contagion dynamics during a financial crisis

• We model the dynamics of boolean network to apply in financial market.
• The model is applied to the financial crisis.
• The states of network are binary and represent economic variables of countries.
• It is possible to simulate how perturbations in the states of specific nodes propagate to the other nodes.

This work presents a network model for representation of the evolution of certain patterns of economic behavior. More specifically, after representing the agents as points in a space in which each dimension associated to a relevant economic variable, their relative “motions” that can be either stationary or discordant, are coded into a boolean network. Patterns with stationary averages indicate the maintenance of status quo  , whereas discordant patterns represent aggregation of new agent into the cluster or departure from the former policies. The changing patterns can be embedded into a network representation, particularly using the concept of autocatalytic boolean networks. As a case study, the economic tendencies of the BRIC countries ++ Argentina were studied. Although Argentina is not included in the cluster formed by BRIC countries, it tends to follow the BRIC members because of strong commercial ties.