Mathematical metrics reveal market instabilities
An international team of interdisciplinary researchers has identified mathematical metrics to characterize the fragility of financial markets. Their work sheds light on the higher-order architecture of financial systems and allows analysts to identify systemic risks like market bubbles or crashes.
Max Planck Institute for Mathematics in the Sciences director Jürgen Jost summarizes the struggle of analyzing market fragility: "there are no easy definitions of a market crash or bubble and merely monitoring established market indices or log-returns does not suffice, but our methodology offers a powerful tool for continuously scanning market risk and thus the health of the financial system". ...
