Financial Networks Statics and Dynamics

Financial analysis is concerned with the study of capital flows over time and space. This book presents a new theory of multi-sector, multi-instrument financial systems based on the visualization of such systems as networks. The framework is both qualitative and computational and depends crucially on the methodologies of finite-dimensional variational inequality theory for the study of statics and equilibrium states and on projected dynamical systems for the study of dynamics and disequilibrium behavior. Moreover, it adds a graphical dimension to the fundamental economic structure of financial systems and their evolution through time.

I Background.- 1 Introduction and Overview.- 2 Foundations of Financial Economics.- II Methodological Foundations.- 3 Variational Inequalities.- 4 Projected Dynamical Systems.- 5 Nonlinear Networks.- III Single Country Models.- 6 Static Single Country Models.- 7 Static Single Country Hedging Models.- 8 Dynamic Single Country Models.- 9 Static Imperfect Market Models.- 10 Dynamic Imperfect Market Models.- IV International Models.- 11 International Financial Models.- 12 International Models with Hedging.- 13 Imperfect Market Models.- V Flow of Funds and Estimation.- 14 Flow of Funds Models.- VI Empirical Results.- 15 Empirical Analysis.- A Linear Algebra and Analysis.- A.1 Linear Algebra.- A.1.1 Vectors.- A.1.2 Matrices.- A.2 Real Analysis.- A.2.1 Sets.- A.2.2 Functions.- A.3 Optimization.- A.3.1 Karush-Kuhn-Tucker Optimization Conditions.- B Probability.- B.1 Probability Theory.- B.1.1 Random Variables and Probability Distributions.- B.1.2 Expectations of a Random Variable.- B.1.2.1 Normal Distribution.- B.1.2.2 Joint Distributions.- C Black and Scholes Model.- List of Figures.- List of Tables.