The Emergence of Global Systemic Risk

Abstract

In this article, we discuss the increasing interdependence of societies, focusing specifically on issues of systemic instability and fragility generated by the new and unprecedented level of connectedness and complexity resulting from globalization. We define the global system as a set of tightly coupled interactions that allow for the continued flow of information, capital, goods, services, and people. Using the general concepts of globality, complexity, networks, and the nature of risk, we analyze case studies of trade, finance, infrastructure, climate change, and public health to develop empirical support for the concept of global systemic risk. We seek to identify and describe the sources and nature of such risks and methods of thinking about risks that may inform future academic research and policy-making decisions.