nep-net New Economics Papers
on Network Economics
Issue of 2020‒08‒31
ten papers chosen by
Alfonso Rosa García
Universidad de Murcia

  1. Welfare targeting in networks By Allouch, Nizar; King, Maia
  2. Network effects and research collaborations By Dennis Essers; Francesco Grigoli; Evgenia Pugacheva
  3. A Semiparametric Network Formation Model with Unobserved Linear Heterogeneity By Luis E. Candelaria
  4. Analysis of the Global Banking Network by Random Matrix Theory By Ali Namaki; Jamshid Ardalankia; Reza Raei; Leila Hedayatifar; Ali Hosseiny; Emmanuel Haven; G. Reza Jafari
  5. Divided Information Space: Media Polarization on Twitter during 2019 Indonesian Election By Maulana, Ardian; Situngkir, Hokky
  6. Neighborhoods, Networks, and Delivery Methods By Barili, E.; Bertoli, P.; Grembi, V.
  7. Short-run disequilibrium adjustment and long-run equilibrium in the international stock markets: A network-based approach By Chen, Yanhua; Li, Youwei; Pantelous, Athanasios; Stanley, Eugene
  8. Early warnings of COVID-19 outbreaks across Europe from social media? By Milena Lopreite; Pietro Panzarasa; Michelangelo Puliga; Massimo Riccaboni
  9. Spatial and Spatio-temporal Engle-Granger representations, Networks and Common Correlated Effects By Bhattacharjee, A.; Ditzen, J.; Holly, S.
  10. Elites and inequality: a case study of plutocratic philanthropy in the UK By Glucksberg, Luna; Russell-Prywata, Louise

  1. By: Allouch, Nizar; King, Maia
    Abstract: This paper investigates welfare targeting for public goods in networks. First, we show that a tax/subsidy scheme (not necessarily budget-balanced) affects each consumer only insofar as it affects his neighbourhood. Second, we show that either a Pareto-improving income redistribution can be found or there exist Negishi weights, which we relate to the network structure. Third, in the case of Cobb–Douglas preferences, we show that a law of welfare targeting holds and links two well-known notions of the comparative statics of policy interventions: neutrality and welfare paradoxical effects. Collectively, our findings uncover the importance of the −1 eigenvalue to economic and social policy: it is an indication of how consumers absorb the impact of income redistribution.
    Date: 2020–08–06
  2. By: Dennis Essers (Economics and Research Department, NBB,); Francesco Grigoli (International Monetary Fund, Research Department,); Evgenia Pugacheva (International Monetary Fund, Research Department,)
    Abstract: We study the determinants of new and repeated research collaborations, drawing on the coauthorship network of the International Monetary Fund (IMF)’s Working Papers series. Being an outlet where authors express their views on topics of interest, and given that IMF staff is not subject to the “publish-or-perish” conditions of the academia, the IMF Working Papers series constitutes an appropriate testing ground to examine the endogenous nature of co-authorship formation. We show that the co-authorship network is characterized by many authors with few direct co-authors, yet indirectly connected to each other through short co-authorship chains. We find that a shorter distance in the co-authorship network is key for starting research collaborations. Also, higher research productivity, being employed in the same department, and having citizenship of the same region help to start and repeat collaborations. Furthermore, authors with different co-authorship network sizes are more likely to collaborate, possibly reflecting synergies between senior and junior staff members.
    Keywords: Research collaboration, co-authorship, networks, research publications, IMF.
    JEL: D85 O31
    Date: 2020–07
  3. By: Luis E. Candelaria
    Abstract: This paper analyzes a semiparametric model of network formation in the presence of unobserved agent-specific heterogeneity. The objective is to identify and estimate the preference parameters associated with homophily on observed attributes when the distributions of the unobserved factors are not parametrically specified. This paper offers two main contributions to the literature on network formation. First, it establishes a new point identification result for the vector of parameters that relies on the existence of a special repressor. The identification proof is constructive and characterizes a closed-form for the parameter of interest. Second, it introduces a simple two-step semiparametric estimator for the vector of parameters with a first-step kernel estimator. The estimator is computationally tractable and can be applied to both dense and sparse networks. Moreover, I show that the estimator is consistent and has a limiting normal distribution as the number of individuals in the network increases. Monte Carlo experiments demonstrate that the estimator performs well in finite samples and in networks with different levels of sparsity.
    Date: 2020–07
  4. By: Ali Namaki; Jamshid Ardalankia; Reza Raei; Leila Hedayatifar; Ali Hosseiny; Emmanuel Haven; G. Reza Jafari
    Abstract: Since 2008, the network analysis of financial systems is one of the most important subjects in economics. In this paper, we have used the complexity approach and Random Matrix Theory (RMT) for analyzing the global banking network. By applying this method on a cross border lending network, it is shown that the network has been denser and the connectivity between peripheral nodes and the central section has risen. Also, by considering the collective behavior of the system and comparing it with the shuffled one, we can see that this network obtains a specific structure. By using the inverse participation ratio concept, we can see that after 2000, the participation of different modes to the network has increased and tends to the market mode of the system. Although no important change in the total market share of trading occurs, through the passage of time, the contribution of some countries in the network structure has increased. The technique proposed in the paper can be useful for analyzing different types of interaction networks between countries.
    Date: 2020–07
  5. By: Maulana, Ardian; Situngkir, Hokky
    Abstract: Nowadays, the understanding of the impact of social media and online news media on the emergence of extreme polarization in political discourse is one of the most pressing challenges for both science and society. In this study, we investigate the phenomenon of political polarization in the indonesian news media network based on the pattern of news consumption patterns of Twitter users during 2019 Indonesian elections. By modeling news consumption patterns as a bipartite network of news outletsTwitter user, and then projecting to a network of news outlets, we observed the emergence of a number of media communites based on audience similarity. By measuring the political alignments of each news outlet, we shows the politically fragmented Indonesian news media landscape, where each media community becomes an political echo chamber for its audience. Our finding highlight the important role of mainstream media as a bridge of information between political echo chamber in social media environment
    Keywords: network, news media network, echo-chamber, twitter, community detection, news consumption
    JEL: C00 C10 C12 C13 C15 C60 C63 C90 D80 D85
    Date: 2020–06
  6. By: Barili, E.; Bertoli, P.; Grembi, V.
    Abstract: We investigate potential mechanisms of information transmission among patients when explaining territorial variations in the use of cesarean sections. Defining networks as mothers living in the same Italian municipality (average size approximately 10,000 residents), we show that a one standard deviation increase of the incidence of cesarean sections for the 12 months before the delivery date in the future mother’s municipality of residence increases the probability of her receiving the treatment by 3%. This result captures mainly network effects for Italian mothers, while it captures both network and neighborhood effects for foreign mothers. Both groups adjust for the transmission of complementary information, such as the incidence of complications due to cesarean sections. The selection of mothers across hospitals does not uniquely explain our results, which are robust to alternative sample selections.
    Keywords: cesarean sections; networks; neighborhood effects;
    JEL: I1 I12
    Date: 2020–08
  7. By: Chen, Yanhua; Li, Youwei; Pantelous, Athanasios; Stanley, Eugene
    Abstract: In this paper, we propose a network-based analytical framework that exploits cointegration and the error correction model to systematically investigate the directional interconnectedness of the short-run disequilibrium adjustment towards long-run equilibrium affecting the international stock market during the period of 5 January 2007 to 30 June 2017. Under this setting, we investigate whether and how the cross-border directional interconnectedness within the world's 23 developed and 23 emerging stock markets altered during the 2007-2009 Global Financial Crisis, 2010-2012 European Sovereign Debt Crisis, and the entire period of 2007-2017. The main results indicate that changes in directional interconnectedness within stock markets worldwide did occur under the impact of the recent financial crises. The extent of the short-run disequilibrium adjustment towards long-run equilibrium for individual stock markets is not homogeneous over different time scales. The derived networks of stock markets interconnectedness allow us to visually characterize how specific stock markets from different regions form interconnected groups when exhibiting similar behaviours, which none the less provides significant information for strategic portfolio and risk management.
    Keywords: International Stock Markets; Cointegration; Error Correction Model; Complex Network Theory; Financial Crisis
    JEL: C12 G01 G15
    Date: 2020–05–29
  8. By: Milena Lopreite; Pietro Panzarasa; Michelangelo Puliga; Massimo Riccaboni
    Abstract: We analyze social network data from Twitter to uncover early-warning signals of COVID-19 outbreaks in Europe in the winter season 2020, before the first public announcements of local sources of infection were made. We show evidence that unexpected levels of concerns about cases of pneumonia were raised across a number of European countries. Whistleblowing came primarily from the geographical regions that eventually turned out to be the key breeding grounds for infections. These findings point to the urgency of setting up an integrated digital surveillance system in which social media can help geo-localize chains of contagion that would otherwise proliferate almost completely undetected.
    Date: 2020–08
  9. By: Bhattacharjee, A.; Ditzen, J.; Holly, S.
    Abstract: We provide a way of representing spatial and temporal equilibria in terms of a Engle-Granger representation theorem in a panel setting. We use the mean group, common correlated effects estimator plus multiple testing to provide a set of weakly cross correlated correlations that we treat as spatial weights. We apply this model to the 324 local authorities of England, and show that our approach successfully mops up weak cross section correlations as well as strong cross sectional correlations.
    Keywords: Spatio-temporal Engle-Granger Theorems, cross sectional dependence
    JEL: C21 C22 C23 R3
    Date: 2020–08–03
  10. By: Glucksberg, Luna; Russell-Prywata, Louise
    Abstract: This paper investigates the role of elite philanthropy in the context of rising global inequality, asking whether large-scale philanthropic donations by elites are well placed to help tackle structural inequality. The challenges posed by such “plutocratic philanthropy” are explored through analysis of a network of the top 30 philanthropists in the United Kingdom and their connections to businesses and foundations, which shows their financial scale and connectivity. This new data is embedded into a review of the most recent social science literature on elites, which focuses on elite reproduction, how wealthy families perceive inequality, and how and why they engage in philanthropic activities. From this data, the paper develops an analysis of the current landscape of inequality, based on the work of British sociologist Mike Savage (2015), arguing that elite philanthropy as an ecosystem— made up of capital, people and institutions—is not well placed to systemically challenge inequalities, because the financial size of elites’ philanthropy tends to be dwarfed by their business activities, and the social functions of philanthropy help maintain the advantaged positions of elites. The paper concludes with informed policy considerations on the role of elite philanthropy in light of the results of the analysis.
    Keywords: elite reproduction; foundations; network analysis; sustainable development; tax
    JEL: J1
    Date: 2020–07–01

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