Analyzing Interconnectivity among Economies

Complecixty of the global financial system first became so obvious when the Lehman Brothers collapsed in 2008. A complex wave of feedback loops which the collapse has generated was far beyond expectations and far more disastrous than classic economic/risk models were suggested. Since then there is growing number of economic papers focused on how the economic network topology, interconnectivity, etc contributes to economic stability. Here you can find to link to Alfred Wong and Tom Fong paper. This study focuses on CDS spreads of 11 Asia Pacific economies and its interactions. A major finding is that all these economies register a significantly higher sovereign risk once the condition that another economy is in distress is imposed.