Modeling the International-Trade Network: a gravity approach

Marco Duenas and Giorgio Fagiolo ()

Journal of Economic Interaction and Coordination, 2013, vol. 8, issue 1, 155-178

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

Keywords: International Trade Network; Gravity equation; Weighted network analysis; Topological properties; Econophysics; F10; D85 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (45)

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Working Paper: Modeling the International-Trade Network: A Gravity Approach (2011)
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DOI: 10.1007/s11403-013-0108-y

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