Interplay between topology and dynamics in the World Trade Web

D. Garlaschelli, T. Di Matteo, T. Aste, G. Caldarelli and M. I. Loffredo

Papers from arXiv.org

Abstract: We present an empirical analysis of the network formed by the trade relationships between all world countries, or World Trade Web (WTW). Each (directed) link is weighted by the amount of wealth flowing between two countries, and each country is characterized by the value of its Gross Domestic Product (GDP). By analysing a set of year-by-year data covering the time interval 1950-2000, we show that the dynamics of all GDP values and the evolution of the WTW (trade flow and topology) are tightly coupled. The probability that two countries are connected depends on their GDP values, supporting recent theoretical models relating network topology to the presence of a `hidden' variable (or fitness). On the other hand, the topology is shown to determine the GDP values due to the exchange between countries. This leads us to a new framework where the fitness value is a dynamical variable determining, and at the same time depending on, network topology in a continuous feedback.

Date: 2007-01
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Published in Eur. Phys. J. B 57,159-164 (2007)

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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:physics/0701030

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