Papers by Franco Ruzzenenti
The goal of D 3.08 to which this paper contributes, is to examine whether financialisation has te... more The goal of D 3.08 to which this paper contributes, is to examine whether financialisation has tended to increase price instability in international energy markets, generating ‘price bubbles’, and whether these markets have been significant transmitters of the effects of the financial crisis. The paper starts by briefly outlining the evolution of energy markets’ regulation (oil, natural gas, coal and electricity) in Europe and in OECD countries, from the late 1990 to now, with the aim of establishing whether liberalization has led to: 1) price reductions, and 2) increased price volatility. Empirical evidence suggest that in all energy markets, since the 2000s, prices rose dramatically and volatility increased slightly However, the most remarkable result is that in the 21 st century, prices of energy commodities began to be locked to the price of oil, showing a level of correlation not seen in previous decades. A possible explanation for the synchronization of energy prices with oil ...
Physical Review E, 2016
In the last few years, the study of multi-layer complex networks has received significant attenti... more In the last few years, the study of multi-layer complex networks has received significant attention. In this work, we provide new measures to analyse dependencies between directed links in different layers of multiplex networks. We show that this requires more than a straightforward extension of the corresponding multiplexity measures that have been developed for undirected multiplexes. In particular, one should take into account the effects of reciprocity, i.e. the tendency of pairs of vertices to establish mutual connections. It is well known that reciprocity is a crucial property of many directed single-layer networks, affecting several dynamical processes taking place on such systems. Here we extend this quantity to directed multiplexes and introduce the notion of multireciprocity, defined as the tendency of links in one layer to be reciprocated by links in a different layer. We introduce multireciprocity measures valid for both binary and weighted networks and then validate these novel quantities on the World Trade Multiplex (WTM), representing the import-export bilateral relations between world countries in different commodities. We show that several pairs of layers exhibit strong multiplexity, an effect which can however be largely encoded into the degree or strength sequences of the various layers. Moreover, we find that most of the pairs of commodities are characterised by positive multireciprocities, even though such values are significantly lower than the usual reciprocity measured on the aggregated network. These results confirm that a multiplex approach to the phenomenon of reciprocity conveys much more information than the analysis of the aggregated network does.
We analyse a multiplex of networks between OECD countries during the decade 2002-2010, which cons... more We analyse a multiplex of networks between OECD countries during the decade 2002-2010, which consists of five financial layers, given by foreign direct investment, equity securities, short-term, long-term and total debt securities, and five environmental layers, given by emissions of N O x , P M 10 SO 2 , CO 2 equivalent and the water footprint associated with international trade. We present a new measure of cross-layer correlations between flows in different layers based on reciprocity. For the assessment of results, we implement a null model for this measure based on the exponential random graph theory. We find that short-term financial flows are more correlated with environmental flows than long-term investments. Moreover, the correlations between reverse financial and environmental flows (i.e. flows of different layers going in opposite directions) are generally stronger than correlations between synergic flows (flows going in the same direction). This suggests a trade-off between financial and environmental layers, where, more financialised countries display higher correlations between outgoing financial flows and incoming environmental flows from lower financialised countries, which could have important policy implications. Five countries are identified as hubs in this finance-environment multiplex: The United States, France, Germany, Belgium-Luxembourg and the United Kingdom.
PLOS ONE, 2015
We analyse a multiplex of networks between OECD countries during the decade 2002-2010, which cons... more We analyse a multiplex of networks between OECD countries during the decade 2002-2010, which consists of five financial layers, given by foreign direct investment, equity securities, short-term, long-term and total debt securities, and five environmental layers, given by emissions of N O x , P M 10 SO 2 , CO 2 equivalent and the water footprint associated with international trade. We present a new measure of cross-layer correlations between flows in different layers based on reciprocity. For the assessment of results, we implement a null model for this measure based on the exponential random graph theory. We find that short-term financial flows are more correlated with environmental flows than long-term investments. Moreover, the correlations between reverse financial and environmental flows (i.e. flows of different layers going in opposite directions) are generally stronger than correlations between synergic flows (flows going in the same direction). This suggests a trade-off between financial and environmental layers, where, more financialised countries display higher correlations between outgoing financial flows and incoming environmental flows from lower financialised countries, which could have important policy implications. Five countries are identified as hubs in this finance-environment multiplex: The United States, France, Germany, Belgium-Luxembourg and the United Kingdom.
Constructal theory predicts structures, both in nature and in human artefacts, tend to optimize f... more Constructal theory predicts structures, both in nature and in human artefacts, tend to optimize flow access. The systems' architecture develops from a principle of maximization of one function under local constrains. The domain of this optimization is a continuous space. We would like here to advance an example in which the system structure is reshaped in a more energy intensive fashion as to maximize the components' interactions due to a symmetry rupture in the space. Flows throughout the system are thereby incremented in a discontinuous way by a complexity leap. Nevertheless, the complexity leap is a step of the developmental pattern that displays the same trend in constructal theory's models: flow maximization. In this paper, we analyze how the productive system evolved its structure, between 1970s and 1990s, to maximize interactions among its parts and thus further develop the transport sub-system. A two-stage shift has been considered: the fordian and the postfordian productive structure. The second structure, given the same amount of parts, has been shown to increase the degree of freedom (path length and path diversity) of the system. The underlying evolutionary pattern is then analyzed. This evolutionary pattern relies on the hypothesis that thermodynamic evolutionary systems are characterized by an ever growing influx of energy driven into the system by self-catalytic processes that must find their way through the constraints of the system. The system initially disposes of the energy by expanding, in extent and in the number of components, up to saturation due to inner or outer constraints. The two counteractive forces, constraints and growing energy flux, expose the systems to new gradients. Every new gradient upon the system represents a symmetry rupture in the components' space. By exploring a new gradient, the system imposes further restrictions on its components and increases its overall degree of freedom.
In 1983 Hamilton demonstrated the correlation between the price of oil and gross national product... more In 1983 Hamilton demonstrated the correlation between the price of oil and gross national product for the U.S. economy. A prolific literature followed exploring the potential correlation of oil prices with other important indices like inflation, industrial production, and food prices, using increasingly refined tools. Our work sheds new light on the role of oil prices in shaping the world economy by investigating the metabolic paths of value across trade between 1960 and 2010, by means of Markov Chain analysis. We show that the interdependence of countries' economies are strictly (anti)correlated to the price of oil. We observed a remarkably high correlation of 0.85, unmatched by any former study addressing the correlation between oil price and major economic indicators.
In this review we establish various connections between complex networks, symmetry, and symmetry ... more In this review we establish various connections between complex networks, symmetry, and symmetry breaking. We first rephrase the main results of network theory in terms of symmetry concepts, then we study link reversal symmetry as a particular example, and finally consider the evolution of the international trade network as a real-world application. We show that a strong embedding in economic space breaks the invariance of the trade network down to disjoint equivalence classes, while the observed evolution of reciprocity is consistent with a symmetry breaking taking place in production space. Our results show that networks can be strongly affected by symmetry-breaking phenomena occurring in embedding spaces, and that network symmetries can therefore suggest, or rule out, possible underlying mechanisms.
"Many real networks lie embedded in a metric space, i.e. a space where distances between nod... more "Many real networks lie embedded in a metric space, i.e. a space where distances between nodes can be properly defined. In such cases, besides their connectivity, vertices can be identified by additional parameters, definable as coordinates, measuring their position and allowing the quantification of their mutual 'proximity'. We will refer to these networks as embedded networks. Embedded networks represent an important subset of real networks: transportation systems, electric power grids, wireless communication networks and the Internet (i.e. the net of physical connections between servers) are only a few examples of systems embedded in a two-dimensional metric space."
Energy Security and Development, 2015
Energy Policy, 2008
This paper addresses the question of whether the rebound effect's size is bigger or smaller than ... more This paper addresses the question of whether the rebound effect's size is bigger or smaller than one. After a brief review of the related economic literature, a thermodynamic perspective tackles this topic by demonstrating that the dispute over the size of the rebound effect relies on a misconception of the thermodynamic nature of energy efficiency. The dichotomy, in fact, concerns the relationship between efficiency and power output rather than the scale of the economic side effects generated by energy efficiency mutations. Early intuitions of the dichotomy efficiency/power belong to the pioneering works of Stanley Jevons, in the field of economics, and Alfred Lotka in that of biology. Their findings are here approached using the basis of finite-time thermodynamics with a simple amendment, the addition of the time variable to the Carnot machinery. The model shows how a process of power maximization always leads to a sub-optimal efficiency level and additionally, that any efficiency improvement, in the context of low energy costs, will shift the power output of the machine instead of reducing energy consumption. A case study taken from the transport system is presented to elucidate this argument.
Energy Policy, 2009
In this paper, we evaluate energy efficiency in the European freight transport sector over three ... more In this paper, we evaluate energy efficiency in the European freight transport sector over three decades, according to a variety of indicators, methodologies and databases. The aim is, on the one hand, of determining major drawbacks in energy efficiency metrics, on the other hand, identifying a possible trend in the sector. The present analysis shows that energy efficiency evaluation is
Ecological Modelling, 2009
Is complexity growth the result of a continuous process or a sudden breakthrough? An increased en... more Is complexity growth the result of a continuous process or a sudden breakthrough? An increased energy density rate is the effect or the cause of a complexity leap? Should we approach complexity change by the perspective of components behaviour or system's space geometry? In this work we address some of the questions regarding the theoretical approach to complexity change. For this purpose a case study drawn by the productive structure and the transport system is considered. We would like here to propose an example in which the system structure is reshaped in a more energy intensive fashion as to increase the components' interactions due to a symmetry rupture in the space. Flows throughout the system are thereby incremented in a discontinuous way by a complexity leap. In the case study, we analyze how the productive system evolved its structure, between 1970s and 1990s, to increase interactions among its parts and thus further develop the transport sub-system. A two-stage shift has been considered: the fordian and the post-fordian productive structure. The second structure, given the same amount of parts, has been shown to increase the degree of freedom (path length and path diversity) of the system. The underlying evolutionary pattern is then analyzed. This evolutionary pattern relies on the hypothesis that thermodynamic evolutionary systems are characterized by an ever growing influx of energy driven into the system by self-catalytic processes that must find their way through the constraints of the system. The system initially disposes of the energy by expanding, in extent and in the number of components, up to saturation due to inner or outer constraints. The two counteractive forces, constraints and growing energy flux, expose the system to new gradients. Every new (spatial) gradient upon the system represents a symmetry rupture in the components' space. By exploring a new gradient, the system imposes further restrictions on its components and increases its overall degree of freedom. The counteractive effects of reduction/increase of degree of freedom concern two different hierarchical levels and occur at two different space and time scales.
Ecological Economics, 2008
The rebound effect presents a major flaw in to energy conservation policies that aim to reduce en... more The rebound effect presents a major flaw in to energy conservation policies that aim to reduce energy consumption through energy efficiency development. Economics and energy related disciplines have thus far developed tools to measure such a phenomenon. This paper attempts to explain this seeming paradox using a thermodynamic-evolutionary theoretical framework in addition to the traditional economic approach. We here propose that evolutionary systems, such as biological or even economic systems, may rearrange themselves in a more complex fashion under the pressure of an increasing flux of energy, driven by the higher conversion rate of greater efficiency. Higher complexity, due to a greater energy density rate, counteracts the positive effects of energy efficiency. We investigated this hypothesis in the context of the road freight transport system and the productive structure. The qualitative analysis in this paper, further substantiated by figures, provides a link between the dynamics of production patterns and the effect of efficiency in the light of the macro-economic effects of increased energy demand. The analysis departs from a rigorous investigation of the actual energy efficiency evolution in the road freight transport system to develop through a survey of the subsequent worldwide economic revolution in the production system. It is then shown how outsourcing, the key feature of globalization, can be identified as the main source of traffic density growth. Finally, four paradigms are used to stress how the shift in the production system must be considered a leap in structural complexity that consequently serves to increase the frequency of components' interactions.
Two years ago the University of Siena started a pro ject aimed at reducing both energy costs and ... more Two years ago the University of Siena started a pro ject aimed at reducing both energy costs and energy con- sumptions. The budget to finance this project was s elf-financed by the University with savings from th e switch from public energy suppliers to private ones, after optioning for the electricity free market. In acco rdance to Di- rective 2002/91/CE
In this review we establish various connections between complex networks, symmetry, and symmetry ... more In this review we establish various connections between complex networks, symmetry, and symmetry breaking. We first rephrase the main results of network theory in terms of symmetry concepts, then we study link reversal symmetry as a particular example, and finally consider the evolution of the international trade network as a real-world application. We show that a strong embedding in economic space breaks the invariance of the trade network down to disjoint equivalence classes, while the observed evolution of reciprocity is consistent with a symmetry breaking taking place in production space. Our results show that networks can be strongly affected by symmetry-breaking phenomena occurring in embedding spaces, and that network symmetries can therefore suggest, or rule out, possible underlying mechanisms.
2012 Eighth International Conference on Signal Image Technology and Internet Based Systems, 2012
In the economic literature, geographic distances are considered fundamental factors to be include... more In the economic literature, geographic distances are considered fundamental factors to be included in any theoretical model whose aim is the quantification of the trade between countries. Quantitatively, distances enter into the so-called gravity models that successfully predict the weight of non-zero trade flows. However, it has been recently shown that gravity models fail to reproduce the binary topology of the World Trade Web. In this paper a different approach is presented: the formalism of exponential random graphs is used and the distances are treated as constraints, to be imposed on a previously chosen ensemble of graphs. Then, the information encoded in the geographical distances is used to explain the binary structure of the World Trade Web, by testing it on the degree-degree correlations and the reciprocity structure. This leads to the definition of a novel null model that combines spatial and non-spatial effects. The effectiveness of spatial constraints is compared to that of nonspatial ones by means of the Akaike Information Criterion and the Bayesian Information Criterion. Even if it is commonly believed that the World Trade Web is strongly dependent on the distances, what emerges from our analysis is that distances do not play a crucial role in shaping the World Trade Web binary structure and that the information encoded into the reciprocity is far more useful in explaining the observed patterns.
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Papers by Franco Ruzzenenti