The present paper introduces an up-to-date methodology to detect Early Warning Signals of critical transitions, that manifest when distress stages in financial markets are about to take place. As a first step, we demonstrate that a high-dimensional dynamical system can be formulated in a simpler...

We study a financial market populated by heterogeneous fundamentalists, whose decisions are driven by ``animal spirits''. Each agent may have optimistic or pessimistic beliefs about the fundamental value, which are selected from time to time on the basis of an evolutionary mechanism. The...