Reconstructing the world trade multiplex: the role of intensive and extensive biases

Rossana Mastrandrea (), Squartini Tiziano, Giorgio Fagiolo () and Diego Garlaschelli
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Rossana Mastrandrea: CPT - E5 Physique statistique et systèmes complexes - CPT - Centre de Physique Théorique - UMR 7332 - AMU - Aix Marseille Université - UTLN - Université de Toulon - CNRS - Centre National de la Recherche Scientifique, CPT - Centre de Physique Théorique - UMR 7332 - AMU - Aix Marseille Université - UTLN - Université de Toulon - CNRS - Centre National de la Recherche Scientifique, Institute of Economics of Sant'Anna [Pisa] - SSSUP - Scuola Universitaria Superiore Sant'Anna = Sant'Anna School of Advanced Studies [Pisa]
Squartini Tiziano: ISC - Istituto Sistemi Complessi [ROME] - CNR - National Research Council of Italy | Consiglio Nazionale delle Ricerche, INSTITUUT LORENTZ - Instituut Lorentz - Universiteit Leiden = Leiden University
Diego Garlaschelli: INSTITUUT LORENTZ - Instituut Lorentz - Universiteit Leiden = Leiden University

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Abstract: In economic and financial networks, the strength of each node has always an important economic meaning, such as the size of supply and demand, import and export, or financial exposure. Constructing null models of networks matching the observed strengths of all nodes is crucial in order to either detect interesting deviations of an empirical network from economically meaningful benchmarks or reconstruct the most likely structure of an economic network when the latter is unknown. However, several studies have proved that real economic networks and multiplexes topologically differ from configurations inferred only from node strengths. Here we provide a detailed analysis of the world trade multiplex by comparing it to an enhanced null model that simultaneously reproduces the strength and the degree of each node. We study several temporal snapshots and almost 100 layers (commodity classes) of the multiplex and find that the observed properties are systematically well reproduced by our model. Our formalism allows us to introduce the (static) concept of extensive and intensive bias, defined as a measurable tendency of the network to prefer either the formation of extra links or the reinforcement of link weights, with respect to a reference case where only strengths are enforced. Our findings complement the existing economic literature on (dynamic) intensive and extensive trade margins. More generally, they show that real-world multiplexes can be strongly shaped by layer-specific local constraints.

Keywords: Networks; World Trade Web; Statistical Physics; Complex systems; Entropy; Econophysics (search for similar items in EconPapers)
Date: 2014-12-08
Note: View the original document on HAL open archive server: https://hal.science/hal-01113938v1
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Published in Physical Review E : Statistical, Nonlinear, and Soft Matter Physics, 2014, 90 (6), pp.062804. ⟨10.1103/PhysRevE.90.062804⟩

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Working Paper: Reconstructing the world trade multiplex: the role of intensive and extensive biases (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01113938

DOI: 10.1103/PhysRevE.90.062804

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