Economic networks in and out of equilibrium

Abstract: Economic and financial networks play a crucial role in various important processes, including economic integration, globalization, and financial crises. Of particular interest is understanding whether the temporal evolution of a real economic network is in a (quasi-)stationary equilibrium, i.e. characterized by smooth structural changes rather than abrupt transitions. Smooth changes in quasi-equilibrium networks can be generally controlled for, and largely predicted, via an appropriate rescaling of structural quantities, while this is generally not possible for abrupt transitions in non-stationary networks. Here we study whether real economic networks are in or out of equilibrium by checking their consistency with quasi-equilibrium maximum-entropy ensembles of graphs. As illustrative examples, we consider the International Trade Network (ITN) and the Dutch Interbank Network (DIN). We show that, despite the globalization process, the ITN is an almost perfect example of quasi-equilibrium network, while the DIN is clearly an out-of-equilibrium network undergoing major structural changes and displaying non-stationary dynamics. Among the out-of-equilibrium properties of the DIN, we find striking early-warning signals of the interbank crisis of 2008.