Financial Contagion in Networks

Cabrales, Antonio; Gale, Douglas; Gottardi, Piero
Authors registered in the RePEc Author Service: Douglas Gale (), Antonio Cabrales and Piero Gottardi

No ECO2015/01, Economics Working Papers from European University Institute

Abstract: This paper provides an introduction to the literature on financial contagion in networks. In the first part, we consider contagion via transmission of shocks, i.e. an abrupt drop in the flow of revenue to one firm, which affects other firms connected to it through financial linkages. We then study informational contagion, by which we mean the process whereby a shock to one market is transmitted to other markets by means of information revealed in the first market.

Date: 2015
New Economics Papers: this item is included in nep-cta and nep-net
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Citations: View citations in EconPapers (35)

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