Endogenous Crisis Waves: Stochastic Model with Synchronized Collective Behavior

Abstract

We propose a simple framework to understand commonly observed crisis waves in macroeconomic agent-based models, which is also relevant to a variety of other physical or biological situations where synchronization occurs. We compute exactly the phase diagram of the model and the location of the synchronization transition in parameter space. Many modifications and extensions can be studied, confirming that the synchronization transition is extremely robust against various sources of noise or imperfections.