Sovereign public debt crisis in Europe. A network analysis

DAVID MATESANZ; GUILLERMO J. ORTEGA

PHYSICA A - STATISTICAL AND THEORETICAL PHYSICS

ELSEVIER SCIENCE BV

Lugar: Amsterdam; Año: 2015 vol. 436 p. 756 - 766

0378-4371

In this paperweanalyse the evolving network structure of the quarterly public debt-to-GDPratio from 2000 to 2014. By applying tools and concepts coming from complex systems westudy the effects of the global financial crisis over public debt network connections andcommunities. Two main results arise from this analysis: firstly, countries public debts tendto synchronize their evolution, increasing global connectivity in the network and dramaticallydecreasing the number of communities. Secondly, a disruption in previous structureis observed at the time of the shock, emerging a more centralized and less diversify networktopological organization which might be more prone to suffer contagion effects. Thislast fact is evidenced by an increasing tendency in countries of similar level of public debtto be connected between them, which we have quantified by the network assortativity.