This project integrates the analysis of financial stress indicators with systemic risk assessment under macroeconomic instability. Students will explore how financial and macroeconomic shocks, such as output drops, over-indebtedness, and inflationary pressures, can be monitored and mitigated through the development of composite financial stress indicators. These indicators will guide market dynamics and allow for a deep analysis of how behavioral economics and psychological biases influence financial decision-making. Leveraging insights from behavioral finance and ABM literature, students will construct behavioral models to predict agent behavior in various economic scenarios. These models will be enhanced with ABMs to simulate how individual decisions aggregate to impact overall financial stability and contribute to systemic risk, with a particular focus on network effects and financial contagion.
Financial Stress Measures and Systemic Risk
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