Complex systems in financial economics: Applications to interbank and stock markets

Complex systems are characterised by strong interaction at the micro level that can induce large changes at the macro level. This thesis applies the theory of complex systems to the interbank market (Part I) and the stock market (Part II). Evidence found in data from the Netherlands and the US makes clear in what sense these markets are complex systems. The observed phenomena are explained by modelling the adaptive behaviour of financial agents, for example how they form their trading relationships or how they choose investment strategies. The applications help to understand the mechanisms behind the emergence of the financial-economic crisis in 2007 and 2008, and relate to the debate on policy measures aiming to prevent a future crisis of this kind.