Modeling the International-Trade Network: A Gravity Approach
arXiv:1112.2867
Abstract
This paper investigates whether the gravity model (GM) can explain the statistical properties of the International Trade Network (ITN). We fit data on international-trade flows with a GM specification using alternative fitting techniques and we employ GM estimates to build a weighted predicted ITN, whose topological properties are compared to observed ones. Furthermore, we propose an estimation strategy to predict the binary ITN with a GM. We find that the GM successfully replicates the weighted-network structure of the ITN, only if one fixes its binary architecture equal to the observed one. Conversely, the GM 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.
References in corpus (7)
- Clustering in Complex Directed Networks
- On the Topological Properties of the World Trade Web: A Weighted Network Analysis
- Identifying the Community Structure of the International-Trade Multi Network
- Interplay between topology and dynamics in the World Trade Web
- Randomizing world trade. I. A binary network analysis
- Randomizing world trade. II. A weighted network analysis
- The World-Trade Web: Topological Properties, Dynamics, and Evolution