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Simplified mathematical model of financial crisis

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  • E32 - Business Fluctuations
  • Cycles
  • E44 - Financial Markets And The Macroeconomy
  • G01 - Financial Crises
  • Economics
  • Mathematics


The framework of mathematical dynamics of economic systems is applied to the development of financial crisis. A view is proposed that the severity of financial crises can be explained by means of superposition of the fluctuations on connected markets exhibited in the form of a resonance phenomenon. The practical actions of the central banks are criticized as contradicting to theoretical implications of the model.

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