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Dynamics of financial crises in the world trade network

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  • Askari, Marziyeh
  • Shirazi, Homayoun
  • Aghababaei Samani, Keivan

Abstract

A simple dynamical model is introduced to simulate the spreading of financial crises in the world trade network. In this model a directed network is constructed in which a weighted and directed link indicates the export value between two countries. The weights are subject to the change by a simple dynamical rule. The process begins with a crisis, i.e. a sudden decrease in the export value of a certain country and spreads throughout the whole network. We compare our results with the real values corresponding to the global financial crisis of 2008 and show that the results of our model are in good agreement with reality.

Suggested Citation

  • Askari, Marziyeh & Shirazi, Homayoun & Aghababaei Samani, Keivan, 2018. "Dynamics of financial crises in the world trade network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 501(C), pages 164-169.
    • Handle: RePEc:eee:phsmap:v:501:y:2018:i:c:p:164-169
    DOI: 10.1016/j.physa.2018.02.153
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    References listed on IDEAS

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    1. Kristin J. Forbes, 2002. "Are Trade Linkages Important Determinants of Country Vulnerability to Crises?," NBER Chapters, in: Preventing Currency Crises in Emerging Markets, pages 77-132, National Bureau of Economic Research, Inc.
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    Cited by:

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    2. Zita Iloskics & Tamás Sebestyén & Erik Braun, 2021. "Shock propagation channels behind the global economic contagion network. The role of economic sectors and the direction of trade," PLOS ONE, Public Library of Science, vol. 16(10), pages 1-26, October.
    3. Yujing Wang & Fu Ren & Ruoxin Zhu & Qingyun Du, 2020. "An Exploratory Analysis of Networked and Spatial Characteristics of International Natural Resource Trades (2000–2016)," Sustainability, MDPI, vol. 12(18), pages 1-34, September.
    4. Ding, Haoyuan & Jin, Yuying & Liu, Ziyuan & Xie, Wenjing, 2019. "The relationship between international trade and capital flow: A network perspective," Journal of International Money and Finance, Elsevier, vol. 91(C), pages 1-11.
    5. Bai, Xiao & Hu, Xiaoqian & Wang, Chao & Lim, Ming K. & Vilela, André L.M. & Ghadimi, Pezhman & Yao, Cuiyou & Stanley, H. Eugene & Xu, Huji, 2022. "Most influential countries in the international medical device trade: Network-based analysis," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 604(C).
    6. Tamás Sebestyén & Zita Iloskics, 2020. "Do economic shocks spread randomly?: A topological study of the global contagion network," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-22, September.

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