Research Article
Mapping Financial Stability: Applying SEIR Model and Complex Network Theory to Mitigate Risk Contagion
@INPROCEEDINGS{10.4108/eai.12-1-2024.2347155, author={Tianyang Liu}, title={Mapping Financial Stability: Applying SEIR Model and Complex Network Theory to Mitigate Risk Contagion}, proceedings={Proceedings of the 3rd International Conference on Big Data Economy and Digital Management, BDEDM 2024, January 12--14, 2024, Ningbo, China}, publisher={EAI}, proceedings_a={BDEDM}, year={2024}, month={6}, keywords={financial risks systemic risk complex network theory seir model basic reproduction number}, doi={10.4108/eai.12-1-2024.2347155} }- Tianyang Liu
Year: 2024
Mapping Financial Stability: Applying SEIR Model and Complex Network Theory to Mitigate Risk Contagion
BDEDM
EAI
DOI: 10.4108/eai.12-1-2024.2347155
Abstract
This study applies complex network theory to financial systems, using a SEIR model to analyze risk spread and the effect of rescue strategies. Key findings include identifying epidemic thresholds that indicate contagion risk and demonstrating that policy interventions can lower this risk. Both homogeneous and heterogeneous networks are examined, showing consistent thresholds. Analysis reveals that stronger rescue efforts lead to lower contagion risk. The model is tested against real data from Chinese and American stock markets, confirming the theory and highlighting how various parameters affect risk distribution. The research supports the development of early warning systems and regulatory improvements for financial stability.
