Modeling Contagious Severity of the Stock Markets

This paper modeled the evolution of the contagious severity of the stock markets combing with the cross-market correlation coefficients, the market capitalizations and the functions of self-remedy into the time-varying coefficients of the epidemic kinetics model. Then we used the data of United States, Russia, Australia, Brazil, China, India, Hong Kong and Japan during the 2007-2009 stock market crisis periods for simulated analysis. The result shows that the epidemic model is alive and can describe the evolution of the contagious severity of the stock markets, and we give the economic meanings of the important parameters.