The Instability of Markets

Posted: 25 Aug 1998

See all articles by Tad Hogg

Tad Hogg

Hewlett-Packard Enterprise - Information Dynamics Laboratory; Xerox Corp. - Palo Alto Research Center

Bernardo A. Huberman

CableLabs

Michael Youssefmir

Arraycom

Abstract

Recent developments in the global liberalization of equity and currency markets, coupled to advances in trading technologies, are making markets increasingly interdependent. This increased fluidity raises questions about the stability of the international financial system. In this paper, we show that as couplings between stable markets grow, the likelihood of instabilities is increased, leading to a loss of general equilibrium as the system becomes increasingly large and diverse.

JEL Classification: D59, F01

Suggested Citation

Hogg, Tad and Huberman, Bernardo A. and Youssefmir, Michael, The Instability of Markets. Available at SSRN: https://ssrn.com/abstract=6541

Tad Hogg

Hewlett-Packard Enterprise - Information Dynamics Laboratory ( email )

1501 Page Mill Rd
Palo Alto, CA 94301
United States

Xerox Corp. - Palo Alto Research Center ( email )

3333 Coyote Hill Road
Palo Alto, CA 94304-1314
United States

Bernardo A. Huberman (Contact Author)

CableLabs ( email )

400 W California Ave
Sunnyvale, CA 94086
United States

Michael Youssefmir

Arraycom

United States

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