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Global Trade Imbalances: A Network Approach

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  • Marco Duenas
  • Giorgio Fagiolo

Abstract

We study trade imbalances between world countries in the period 1960-2000 using a complex-network approach. We show that trade imbalances in absolute value are characterized by a hierarchical arrangement wherein few rich economies display high clustering and carry an important amount of global-trade imbalances. In contrast, trade imbalances in relative terms show a more fragmented topology, with less concentrated clustering which is particularly high for emergent economies. In addition, we find that traditional null random-network models and the gravity model poorly predict the topology of trade imbalance networks. Our main finding is that the evolution of the international trade has caused very heterogeneous imbalances in world economies, which may have important consequences for global instability and development

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Bibliographic Info

Paper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 2013/12.

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Date of creation: 21 May 2013
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Handle: RePEc:ssa:lemwps:2013/12

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Keywords: Trade Imbalances; International Trade Network; Gravity Model; Null Models;

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References

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  1. Joao Santos Silva & Silvana Tenreyro, 2005. "The Log of Gravity," CEP Discussion Papers dp0701, Centre for Economic Performance, LSE.
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  3. Matteo Barigozzi & Giorgio Fagiolo & Diego Garlaschelli, 2009. "Multinetwork of international trade: A commodity-specific analysis," Papers 0908.1879, arXiv.org, revised Jun 2010.
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Cited by:
  1. KRINGS, Gautier M. & CARPANTIER, Jean-François & dELVENNE, Jean-Charles & ,, 2013. "Trade integration and trade imbalances in the European Union: a network perspective," CORE Discussion Papers 2013056, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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