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Modeling the International-Trade Network: a gravity approach

  • Marco Dueñas

    ()

  • Giorgio Fagiolo

    ()

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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File URL: http://hdl.handle.net/10.1007/s11403-013-0108-y
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Article provided by Springer & Society for Economic Science with Heterogeneous Interacting Agents 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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