Graph Theory and Networks
The economy is obviously a complex entity characterized by interactions between multiple and heterogenous agents over time. Many attempts have been made to visually represent and model such interactions. One approach that has been increasingly used involves the use of tools and concepts from a branch of mathematics known as graph theory. Its origin dates back to Euler's solution of the "Konigsberg Bridge Problem" in 1736. In the social sciences, sociologists have been early enthusiasts of graph theory. The history of "social network analysis" (SNA) dates back to the 1930s, with significant breakthroughs in the 1960s (Scott, 1991). In economics, some of the early studies employing graph theory can be traced back to the second half of the 1990s. It took roughly another 15 years before it became the basis of a new field of study in economics under the banner of "social networks".