shocksspread

shocksspread is a term used in network theory and applied economics to describe the process by which a perturbation or shock in one part of a system propagates through interconnected components, potentially amplifying and triggering further disturbances. The concept emphasizes both the pathways of transmission and the dynamic response of the system, including feedback mechanisms and nonlinearity.

In economics, shocks can be demand, supply, policy, or financial, spreading across markets, firms, and countries through trade links, ownership, and financial exposures. In infrastructure and social networks, shocks may be information, demand changes, or failures that cascade through nodes connected by interactions.

Transmission channels include financial linkages (interbank exposures, capital flows), supply-chain dependencies, information diffusion, and behavioral responses. The speed and extent of spread depend on network topology, node heterogeneity, buffer capacities, and policy interventions. Nonlinearities and thresholds can produce sudden cascades from small initial shocks.

Modeling approaches include diffusion models, agent-based simulations, percolation analyses, and dynamic systems with feedback loops. Metrics used to quantify shocksspread include propagation speed, affected fraction of nodes, amplification factor, and time to peak.

Applications include assessing systemic risk, designing resilience strategies, and evaluating policy responses. Critics note that the lack of standardized definition and data limitations can hinder comparability across studies.