Functional Inequalities and Analysis of Contagion in the Financial Networks”

Year
2014
Type(s)
Author(s)
P. Daniele, S. Giuffrè, M. Lorino, A. Maugeri, C. Mirabella
Source
Handbook of Functional Equations – Functional Inequalities, Springer Optimization and Its Applications, Vol. 95, T.M. Rassias et al. (eds.), 2014,129-146
Url
http://goo.gl/uaE2Jc

In very recent papers, using delicate tools of functional analysis, a general 2 equilibrium model of financial flows and prices is studied. In particular, without using a technical language, but using the universal language of mathematics, some significant laws, such as the Deficit formula, the Balance law and the Liability formula for the management of the world economy are provided. Further a simple but useful economical indicator E(t ) is considered. In this paper, considering the Lagrange dual formulation of the financial model, the Lagrange variables called “deficit” and “surplus” variables are considered. By means of these variables, we study the possible insolvencies related to the financial instruments and their propagation to the entire system, producing a “financial contagion”.

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