The authors argue that the world constitutes a tightly coupled, global complex system that endogenously generates systemic risks and vulnerabilities as it grows more complex. After discussing complexity, risk, and networks as key elements of their framework, they provide case studies of global systemic risk in trade, finance, infrastructure, climate change, and public health. The […]
The Emergence of Global Systemic Risk Read More »
Dirk Helbing demonstrates that “Systemic failures and extreme events are consequences of the highly interconnected systems and networked risks humans have created. When networks are interdependent this makes them even more vulnerable to abrupt failures.” He surveys key concepts in complexity and network science, draws upon examples of financial meltdowns and crowd disasters, and ultimately
Globally Networked Risks and How to Respond Read More »
Ian Goldin and Mike Mariathasan argue that systemic risk is endemic to globalization that cannot be removed. “It is a process to be managed rather than a problem to be solved” (p. xiii). But rather than retreat from globalization and forfeit its considerable benefits, the authors argue that systemic risk requires global governance reforms to
The Butterfly Defect: How Globalization Creates Systemic Risks, and What to Do about it Read More »
George G. Kaufman and Kenneth E. Scott provide one of the most often cited definitions of systemic risk as “the risk or probability of breakdowns in an entire system, as opposed to breakdowns in individual parts or components, and is evidenced by co-movements (correlations) among most or all parts” (p. 371). They explain how systemic
What Is Systemic Risk, and Do Bank Regulators Retard or Contribute to It? Read More »
