arXiv 2 May 2026 · Econometrics
arXiv:2605.01561 · PDF · DOI · OpenAlex · Extracted main text
This paper develops a Hall-Sandpile model of economic instability that combines a Hall-like transversal stress mechanism with sandpile threshold dynamics on a real production-network substrate. In analogy with the physical Hall effect, where exposed flows under an external field generate stress in a transversal direction, we model economic shocks as fields that act on flow-intensive, low-redundancy, low-capacity nodes and produce systemic stress through a multiplicative conversion function. The accumulated stress drives a discrete toppling rule and an avalanche dynamics whose effective activation threshold declines with transversal exposure. The model is calibrated on annual World Input--Output Database (WIOD) production networks for 2000--2014 and simulated on the 2014 substrate (2{,}283 country--sector nodes) under three alternative propagation normalisations to avoid mechanical near-criticality from row-stochastic operators. Controlled Monte Carlo experiments over external field intensity and redundancy stress generate four ordered regimes: stable absorption, latent fragility, critical transition, and avalanche regime. Mean avalanche size and the probabilities of finite-size systemic events $\Pr(S\!\geq\!5)$, $\Pr(S\!\geq\!10)$ and $\Pr(S\!\geq\!20)$ rise jointly with field intensity and redundancy stress. Tail diagnostics show regime-dependent thickening of the avalanche distribution, but the estimated tail indices remain too high to interpret as evidence of universal power-law criticality. The contribution is therefore a finite-size, real-network description of how transversal stress activates structural fragility, not a claim of self-organised criticality in the global economy.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Vallarino, Diego (2024) Sandpile economics: A geometric perspective on macroeconomic fragility self | 1.000 | 5 | 4 | 100% |
| 2 | Timmer, Marcel P. and Dietzenbacher, Erik and Los, Bart and Stehrer,… (2015) An illustrated user guide to the World Input–Output Database: The case of global automotive production | 0.928 | 4 | 4 | 100% |
| 3 | Vespignani, Alessandro and Zapperi, Stefano (1998) How self-organized criticality works: A unified mean-field picture | 0.928 | 4 | 4 | 100% |
| 4 | Bak, Per and Tang, Chao and Wiesenfeld, Kurt (1987) Self-organized criticality: An explanation of the 1/f noise | 0.928 | 4 | 3 | 100% |
| 5 | Carvalho, Vasco M. and Nirei, Makoto and Saito, Yukiko U. and Tahbaz… (2021) Supply chain disruptions: Evidence from the great east Japan earthquake | 0.843 | 3 | 3 | 100% |
| 6 | Timmer, Marcel P. and Los, Bart and Stehrer, Robert and de Vries, Ga… (2016) An anatomy of the global trade slowdown based on the WIOD 2016 release | 0.843 | 3 | 3 | 100% |
| 7 | Turcotte, Donald L (1999) Self-organized criticality | 0.737 | 3 | 2 | 100% |
| 8 | Acemoglu, Daron and Carvalho, Vasco M. and Ozdaglar, Asuman and Tahb… (2012) The network origins of aggregate fluctuations | 0.644 | 2 | 2 | 100% |
| 9 | Bak, Per and Tang, Chao and Wiesenfeld, Kurt (1988) Self-organized criticality | 0.644 | 2 | 2 | 100% |
| 10 | Barrot, Jean-Noël and Sauvagnat, Julien (2016) Input specificity and the propagation of idiosyncratic shocks in production networks | 0.644 | 2 | 2 | 100% |
Showing the top 10 of 35 scored citations.