2011/26 | LEM Working Paper Series | |
Null Models of Economic Networks: The Case of the World Trade Web |
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Giorgio Fagiolo, Tiziano Squartini, Diego Garlaschelli |
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Keywords | ||
World Trade Web; Null Models of Networks; Complex Networks; International Trade
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JEL Classifications | ||
D85, C49, C63, F10
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Abstract | ||
In all empirical-network studies, the observed properties of economic
networks are informative only if compared with a well-defined null
model that can quantitatively predict the behavior of such properties
in constrained graphs. However, predictions of the available
null-model methods can be derived analytically only under assumptions
(e.g., sparseness of the network) that are unrealistic for most
economic networks like the World Trade Web (WTW). In this paper we
study the evolution of the WTW using a recently-proposed family of
null network models. The method allows to analytically obtain the
expected value of any network statistic across the ensemble of
networks that preserve on average some local properties, and are
otherwise fully random. We compare expected and observed properties of
the WTW in the period 1950-2000, when either the expected number of
trade partners or total country trade is kept fixed and equal to
observed quantities. We show that, in the binary WTW, node-degree
sequences are sufficient to explain higher-order network properties
such as disassortativity and clustering-degree correlation, especially
in the last part of the sample. Conversely, in the weighted WTW, the
observed sequence of total country imports and exports are not
sufficient to predict higher-order patterns of the WTW. We discuss
some important implications of these findings for international-trade
models.
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