A Cladistics Analysis of Financial Stability and Instability across 58 Countries 2007~2012

Abstract

Financial stability and instability of countries’ economies are of significant interest to economists and politicians as this affects economic growth and the general wellbeing of the population. But determining on a reliable basis the factors that might indicate imminent financial instability has proved elusive. This paper uses a systems-based analysis that is a consistent analytical tool with the economic and financial systems being complex adaptive systems and finds systemic characteristics over the period 2007~2012 that are indicative of financial stability and instability but also finds that no indictors are useful when the systems transition through a tipping point as they did in the Global Financial Crisis (GFC). The major conclusion is that determining reliable indicators of global financial instability remains elusive.