2011/26  LEM Working Paper Series  
Null Models of Economic Networks: The Case of the World Trade Web 

Giorgio Fagiolo, Tiziano Squartini, Diego Garlaschelli 

Keywords  
World Trade Web; Null Models of Networks; Complex Networks; International Trade


JEL Classifications  
D85, C49, C63, F10


Abstract  
In all empiricalnetwork studies, the observed properties of economic
networks are informative only if compared with a welldefined null
model that can quantitatively predict the behavior of such properties
in constrained graphs. However, predictions of the available
nullmodel 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 recentlyproposed 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 19502000, 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, nodedegree
sequences are sufficient to explain higherorder network properties
such as disassortativity and clusteringdegree 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 higherorder patterns of the WTW. We discuss
some important implications of these findings for internationaltrade
models.


Downloads  


Back 