Using our updated model of the payment exchange system within the banking industry, we have introduced sudden local economic shocks and calculated their effect on the stability of the financial system. Our results suggest that the probability of a total banking failure, i.e., the systemic risk...

We construct a simple firm-based automata model for global economic inter-dependence of countries using modern notions of self-organized criticality and recently developed dynamical-renormalization-group methods (e.g., L. Pietronero et al., Phys. Rev. Lett., 72(11):1690 (1994); J. Hasty and K....