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Modeling the International-Trade Network: a gravity approach

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  • Marco Dueñas

    ()

  • Giorgio Fagiolo

    ()

Abstract

We investigate whether the gravity model (GM) can explain the statistical properties of the International Trade Network (ITN). We fit data on trade flows with a GM using alternative estimation techniques and we build GM-based predictions for the weighted topological properties of the ITN, which are then compared to the observed ones. Our exercises show that the GM: (i) may replicate part of the weighted-network structure only if the observed binary architecture is kept fixed; (ii) is not able to explain higher-order statistics that, like clustering, require the knowledge of triadic link-weight topological patterns, even if the binary structure perfectly replicates the observed one; (iii) performs very badly when asked to predict the presence of a link, or the level of the trade flow it carries, whenever the binary structure must be simultaneously estimated. Copyright Springer-Verlag Berlin Heidelberg 2013

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Bibliographic Info

Article provided by Springer in its journal Journal of Economic Interaction and Coordination.

Volume (Year): 8 (2013)
Issue (Month): 1 (April)
Pages: 155-178

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Handle: RePEc:spr:jeicoo:v:8:y:2013:i:1:p:155-178

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Web page: http://www.springer.com/economics/economic+theory/journal/11403

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Related research

Keywords: International Trade Network; Gravity equation; Weighted network analysis; Topological properties; Econophysics; F10; D85;

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References

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Citations

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Cited by:
  1. Marco Duenas & Giorgio Fagiolo, 2013. "Global Trade Imbalances: A Network Approach," LEM Papers Series 2013/12, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  2. Angela Abbate & Luca De Benedictis & Giorgio Fagiolo & Lucia Tajoli, 2012. "The International Trade Network in Space and Time," LEM Papers Series 2012/17, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  3. Francesco Picciolo & Tiziano Squartini & Franco Ruzzenenti & Riccardo Basosi & Diego Garlaschelli, 2012. "The role of distances in the World Trade Web," Papers 1210.3269, arXiv.org, revised Oct 2012.
  4. Riccardo Chiarucci & Franco Ruzzenenti & Maria I. Loffredo, 2013. "Detecting spatial homogeneity in the world trade web with Detrended Fluctuation Analysis," Papers 1308.0526, arXiv.org, revised Nov 2013.

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