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We consider a monetary authority that provides an explicit inflation target in order to align expectations with the policy objective. However, biased perceptions of the target may arise due to imperfect information flows. We allow agents to revise expectations over time and we model their recursive choice among prediction strategies as an optimization problem under rational inattention. We then investigate whether a simple policy rule can steer the economy toward the targeted equilibrium. Our findings suggest that determinacy under rational expectations may not be sufficient to reach the target. Instead, monetary policy should be fine-tuned to correct agents’ biased beliefs.

[This corrects the article DOI: 10.1371/journal.pone.0167781.].

This work investigates financial volatility cascades generated by SARS-CoV-2 related news using concepts developed in the field of seismology. We analyze the impact of socio-economic and political announcements, as well as of financial stimulus disclosures, on the reference stock markets of the United States, United Kingdom, Spain, France, Germany and Italy. We quantify market efficiency in processing SARS-CoV-2 related news by means of the observed Omori power-law exponents and we relate these empirical regularities to investors’ behavior through the lens of a stylized Agent-Based financial market model. The analysis reveals that financial markets may underreact to the announcements by taking a finite time to re-adjust prices, thus moving against the efficient market hypothesis. We observe that this empirical regularity can be related to the speculative behavior of market participants, whose willingness to switch toward better performing investment strategies, as well as their degree of reactivity to price trend or mispricing, can induce long-lasting volatility cascades.

We introduce an indicator that aims to detect the emergence of market instabilities by quantifying the intensity of self-organizing processes arising from stock returns’ co-movements. In financial markets, phenomena like imitation, herding and positive feedbacks characterize the emergence of endogenous instabilities, which can modify the qualitative and quantitative behavior of the underlying system. The impossibility to formalize ex-ante the dynamic laws that rule the evolution of financial systems motivates the use of a parsimonious synthetic indicator to detect the disruption of an existing equilibrium configuration. Here we show that the emergence of an interconnected sub-graph of stock returns co-movements from a broader market index is a signal of an out-of-equilibrium transition of the underlying system. To test the validity of our approach, we propose a model-free application that builds on the identification of up and down market phases. Phenomena like imitation, herding and positive feedbacks in the complex financial markets characterize the emergence of endogenous instabilities, which however is still understudied. Here the authors show that the graph-based approach is helpful to timely recognize phases of increasing instability that can drive the system to a new market configuration.

Understanding the complexity of pharmaceutical expenditures across U.S. states is critical for designing efficient healthcare policies and ensuring equitable drug access. This study applies network-based economic complexity methods to analyze state-level Medicaid drug spending, leveraging Medicaid State Drug Utilization Data (SDUD) from 2018 to 2024. Using Revealed Comparative Advantage (RCA) and the Method of Reflections, we quantify the sophistication of pharmaceutical consumption and identify structural inefficiencies in drug reimbursement policies. Our findings reveal substantial heterogeneity in pharmaceutical complexity across states, with highly diversified markets in states like California and Texas, while others, such as Wyoming and West Virginia, exhibit lower complexity due to restrictive formulary policies and healthcare infrastructure limitations. A 15% decline in network density over the study period suggests consolidation in reimbursement practices, influenced by regulatory interventions and cost-containment strategies. Additionally, Medicaid expansion states show a 20% increase in prescription utilization, particularly for antiviral and mental health medications. Null model comparisons highlight systematic deviations from expected expenditure patterns, with states like Arkansas and Nebraska showing lower-than-expected pharmaceutical embeddedness, whereas Massachusetts and California appear more integrated than network models predict. These findings suggest that state-specific policies, provider behavior, and market dynamics significantly shape pharmaceutical expenditures beyond structural network constraints, as well as they offer significant implications for policymakers and healthcare providers seeking to balance cost efficiency with equitable medication distribution.

This paper proposes a new methodology based on non-negative matrix factorization to detect communities and to identify central nodes in a network as well as within communities. The method is specifically designed for directed weighted networks and, consequently, it has been applied to the interbank network derived from the e-MID interbank market. In an interbank network indeed links are directed, representing flows of funds between lenders and borrowers. Besides distinguishing between Systemically Important Borrowers and Lenders, the technique complements the detection of systemically important banks, revealing the community structure of the network, that proxies the most plausible areas of contagion of institutions' distress.

We present a cobweb model to explain price adjustment in a competitive market with homogeneous firms based on assumptions from Prospect Theory. Price changes are evaluated with respect to a psychological reference price which enters directly into the demand function. Accordingly, firms face a downward-sloping demand curve that is kinked at the consumers’ reference price. Differently from the traditional cobweb model, the economy is described by a discontinuous map. Without assuming specific non-linearities and keeping the essential underlying mechanics of the model intact, we find that the implementation of several features from Prospect Theory into our simple cobweb model may significantly influence the market dynamics. Behavioral parameters play an important role for the market stability by reducing fluctuations and by directly affecting consumers’ demand as well as production decisions.

This article tackles the issue of local and global dynamics in a nonlinear duopoly with quantity setting (managerial) firms and horizontal product differentiation. It studies how the dynamics of a two-dimensional discrete time map evolves by focusing on changes either in the degree of product differentiation or the managerial power in the market share bonus. By combining mathematical techniques and numerical experiments, it shows that the Nash equilibrium of the game may not describe the long-term outcomes of the market. This holds because the fixed point of the map may be unstable or because different attractors (simple or chaotic) may capture the long-term dynamics of the model. The article also analyzes market dynamics when a new potential entrant tries to enter or, alternatively, a firm that was already in the market closes down and then tries to re-enter in a context where there is already an incumbent with a strictly positive quantity. The potential entrant may be subject to entry barriers or enters the market depending on the structure of consumers’ preferences and the demands of products of both varieties. In particular, the article analyzes some economic consequences of the non-invertibility of the map in the entry process.

Keratoconus is a corneal disease which results in progressive thinning and protrusion of the cornea leading to irregular astigmatism. The purpose of this study was to evaluate longitudinal changes in corneal volume (CV) occurring over time in keratoconus eyes. Consecutive patients affected by keratoconus were evaluated by means of anterior segment-optical coherence tomography (AS-OCT) at two different time points: baseline (T0) and after 1 year (T1). Anterior and posterior refractive value; corneal thickness at the thinnest point (TP) and corneal volume (CV) calculated within discs of 3, 5 and 8 mm of diameter; anterior chamber depth (ACD); and anterior chamber volume (ACV) were obtained. Enrolled patients were divided into 3 groups (groups 1, 2, 3) according to the increasing disease severity and into 2 groups (groups A, B) according to the progression or stability of the disease. Overall, 116 eyes of 116 patients (76 males and 40 females, mean age 34.76 ± 13.99 years) were included. For the entire group of keratoconus patients, in comparison with T0, mean TP decreased at T1 from 458.7 ± 52.2 µm to 454.6 ± 51.6 µm (p = 0.0004); in parallel, mean value of CV calculated at 5 mm and 8 mm decreased significantly (from 10.78 ± 0.8 at T0 to 10.75 ± 0.79 at T1 (p = 0.02), and from 32.03 ± 2.01 mm3 at T0 to 31.95 ± 1.98 at T1 (p = 0.02), respectively). Conversely, there were no statistically significant differences in CV at 3 mm from T0 to T1 (p = 0.08), as well as for ACD and ACV. Regarding the course of the disease, patients belonging to group A showed statistically significant differences from T0 to T1 for TP, and for CV at 3 mm, 5 mm and 8 mm (p < 0.0001, p < 0.0001, p < 0.001 and p = 0.0058 respectively). There were no statistically significant differences for ACD (p = 0.6916) and ACV calculated at 3, 5 and 8 mm (p = 0.7709, p = 0.3765, p = 0.2475, respectively) in group A. At the same time, no statistically significant differences for ACD (p = 0.2897) and ACV calculated at 3, 5 and 8 mm (p = 0.9849, p = 0.6420, p = 0.8338, respectively) were found in group B. There were statistically significant positive correlations between changes of TP and CV at 3 mm (r = 0.6324, p < 0.0001), 5 mm (r = 0.7622, p < 0.0001) and 8 mm (r = 0.5987 p < 0.0001). In conclusion, given the strong correlation with TP, CV might be considered an additional AS-OCT parameter to be used in association with conventional parameters when detecting longitudinal changes in keratoconic eyes.

The dynamics of a pure exchange overlapping generations model with endogenous money growth rule is investigated. We consider a nonlinear monetary policy rule which, in each period, bounds the money growth rate so that money is determined by the deviation of the inflation rate from its target. More precisely, we introduce such a mechanism through a sigmoidal money adjustment mechanism characterized by the presence of two asymptotes that bound the money variation, and thus the dynamics. It is shown that, depending on the timing of the monetary policy and the degree of reaction of the Central Bank, the target equilibrium may be destabilized via different types of bifurcations. Multistability and coexistence of attractors may also occur and the study of the basins of attraction allows us to analyze the global dynamic properties of the economy under scrutiny. We find that active monetary policy rules may be relevant for their stabilizing properties, but they also may open the door to equilibrium cycles of any periodicity and even chaos.