Visualizing Indicators of Debt Crises in a Lower Dimension

Author(s):  
Peter Sarlin

Since the 1980s, two severe global waves of sovereign defaults have occurred in less developed countries (LDCs): the LDC defaults in the 1980s and the LDC defaults at the turn of the 21st century. To date, the topic is contemporary, while the forecasting and monitoring results of debt crises are still at a preliminary stage. This chapter explores whether the application of the Self-Organizing Map (SOM), a neural network-based visualization tool, facilitates the monitoring of multidimensional financial data. Thus, this chapter presents a SOM model for visualizing the evolution of sovereign debt crises’ indicators. The results of this chapter indicate that the SOM is a feasible tool for visualization of early warning signals of sovereign defaults.

2003 ◽  
Vol 2 (3) ◽  
pp. 171-181 ◽  
Author(s):  
Tomas Eklund ◽  
Barbro Back ◽  
Hannu Vanharanta ◽  
Ari Visa

In this paper, we illustrate the use of the self-organizing map technique for financial performance analysis and benchmarking. We build a database of financial ratios indicating the performance of 91 international pulp and paper companies for the time period 1995–2001. We then use the self-organizing map technique to analyze and benchmark the performance of the five largest pulp and paper companies in the world. The results of the study indicate that by using the self-organizing maps, we are able to structure, analyze, and visualize large amounts of multidimensional financial data in a meaningful manner.


Author(s):  
Kupelyants Hayk

The introduction sets the scene for the examination of sovereign defaults. It sets the structure of and the methodology employed in the book. It provides a summary overview of sovereign debt crises, ensuing restructurings, and litigation. It also introduces the reader to the debate about the legitimacy of litigation against impecunious sovereign debtors.


Author(s):  
Hayk Kupelyants

The introduction sets the scene for the examination of sovereign defaults. It sets the structure of and the methodology employed in the book. It provides a summary overview of sovereign debt crises, ensuing restructurings, and litigation. It also introduces the reader to the debate about the legitimacy of litigation against impecunious sovereign debtors.


Author(s):  
Tien Ho-Phuoc ◽  
Anne Guerin-Dugue

The Self-Organizing Map (Kohonen, 1997) is an effective and a very popular tool for data clustering and visualization. With this method, the input samples are projected into a low dimension space while preserving their topology. The samples are described by a set of features. The input space is generally a high dimensional space Rd. 2D or 3D maps are very often used for visualization in a low dimension space (2 or 3). For many applications, usually in psychology, biology, genetic, image and signal processing, such vector description is not available; only pair-wise dissimilarity data is provided. For instance, applications in Text Mining or ADN exploration are very important in this field and the observations are usually described through their proximities expressed by the “Levenshtein”, or “String Edit” distances (Levenshtein, 1966). The first approach consists of the transformation of a dissimilarity matrix into a true Euclidean distance matrix. A straightforward strategy is to use “Multidimensional Scaling” techniques (Borg & Groenen, 1997) to provide a feature space. So, the initial vector SOM algorithm can be naturally used. If this transformation involves great distortions, the initial vector model for SOM is no longer valid, and the analysis of dissimilarity data requires specific techniques (Jain & Dubes, 1988; Van Cutsem, 1994) and Dissimilarity Self Organizing Map (DSOM) is a new one. Consequently, adaptation of the Self-Organizing Map (SOM) to dissimilarity data is of a growing interest. During this last decade, different propositions emerged to extend the vector SOM model to pair-wise dissimilarity data. The main motivation is to cope with large proximity databases for data mining. In this article, we present a new adaptation of the SOM algorithm which is compared with two existing ones.


2007 ◽  
Vol 101 (4) ◽  
pp. 711-759 ◽  
Author(s):  
Michael Waibel

In recent years, sovereign debt crises have received much attention from the perspective of international public policy, but an effective legal solution to sovereign defaults has yet to coalesce within international law. Over the last two decades, private creditors have increasingly resorted to litigation in national courts, though without great success, in an effort to obtain payment on defaulted sovereign debt. Another, emerging option is arbitration —in particular, before the International Centre for Settlement of Investment Disputes (ICSID). Will ICSID be the new venue of choice for recovering on sovereign bonds? The conclusion reached here is that attempts to take defaulting countries to ICSID arbitration are unlikely to succeed.


Author(s):  
Jerome Roos

The European debt crisis has rekindled long-standing debates about the power of finance and the fraught relationship between capitalism and democracy in a globalized world. This book unravels a striking puzzle at the heart of these debates—why, despite frequent crises and the immense costs of repayment, do so many heavily indebted countries continue to service their international debts? The book provides a sweeping investigation of the political economy of sovereign debt and international crisis management. It takes readers from the rise of public borrowing in the Italian city-states to the gunboat diplomacy of the imperialist era and the wave of sovereign defaults during the Great Depression. The book vividly describes the debt crises of developing countries in the 1980s and 1990s, and sheds new light on the recent turmoil inside the Eurozone—including the dramatic capitulation of Greece's short-lived anti-austerity government to its European creditors in 2015. Drawing on in-depth case studies of contemporary debt crises in Mexico, Argentina, and Greece, the book paints a disconcerting picture of the ascendancy of global finance. It shows how the profound transformation of the capitalist world economy over the past four decades has endowed private and official creditors with unprecedented structural power over heavily indebted borrowers, enabling them to impose painful austerity measures and enforce uninterrupted debt service during times of crisis—with devastating social consequences and far-reaching implications for democracy.


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