Self-Organized Criticality (SOC) has been proposed as a paradigm that may rationalize the emergence of macrofinancial fluctuations. The wave innovative thinking sparked by this proposal continues to produce interesting contributions in many areas economics, ranging from macroeconomics finance. In review, we propose guided tour these achievements, highlighting analysis SOC equilibria is promisin...

In this paper, we develop an aggregation procedure using time-varying weights for constructing the common component of international economic fluctuations. The methodology for deriving time-varying weights is based on some stylised features of the data documented in the paper. The model allows for a unified treatment of cyclical and seasonal fluctuations and also accommodates the dynamic propag...

This paper compares four equilibrium business cycle models with increasing returns to scale production technologies that allow for aggregate fluctuations due to self-fulfilling expectations. Necessary and sufficient conditions for the existence of stationary sunspot equilibria are derived. Numerical examples demonstrate that the degree of increasing returns necessary for the existence of statio...

defaulted bonds is defensible on the grounds that they have a reasonably important bearing on an investment decision. It is harder to make such a case for investors’ scrutiny of the annual, quarterly, and monthly fluctuations in recovery rates. As we shall show, the short-run variability of recovery rates, particularly within priority classes (senior secured, senior unsecured, subordinated) con...

This note shows that introducing into the economy a few number of agents who do not support sunspots theories magnifies endogenous business cycles fluctuations when the current state of the economic system is sensitive enough to traders' forecasts, or equivalently, in presence of indeterminacy. Citation: Gauthier, Stéphane, (2004) "Small departures from rationality magnify fluctuations." Econom...

This paper examines the role of external shocks in explaining macroeconomic fluctuations in African countries. We construct a quantitative, stochastic, dynamic, multi-sector equilibrium model of a small open economy calibrated to represent a "typical" African economy. In our framework, external shocks consist of trade shocks, modeled as fluctuations in the prices of exported primary commodities...