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International Trade and Financial Integration : a Weighted Network Analysis

Author

Listed:
  • Giorgio Fagiolo

    (Laboratory of Economics and Management (LEM))

  • Javier Reyes

    (Department of Economics (AR))

  • Stefano Schiavo

    (Observatoire français des conjonctures économiques (OFCE))

Abstract

In this paper we compare the degree and patterns of trade and financial integration exploiting network analysis. We start from a simple binary analysis and then move to a more appropriate weighted approach, presenting a detailed overview of international goods and financial markets integration, and compare their main characteristics. Moving from binary to weighted analysis changes considerably the properties of the networks, and with them the picture of the integration process. Limiting to a binary approach can thus lead to a misrepresentation of the underlying economic phenomena. We find that the trade network is almost fully connected while international financial integration is less pervasive. Also, regional links continue to play a relevant role.

Suggested Citation

  • Giorgio Fagiolo & Javier Reyes & Stefano Schiavo, 2007. "International Trade and Financial Integration : a Weighted Network Analysis," Sciences Po publications 2007-11, Sciences Po.
    • Handle: RePEc:spo:wpmain:info:hdl:2441/6122
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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