The International Trade Network: weighted network analysis and modelling

TL;DR

This paper applies critical phenomena tools to analyze the International Trade Network, revealing universal features like log-normal link weight distribution and power-law trade strength growth, and introduces a dynamic model based on the gravity law.

Contribution

It demonstrates the applicability of critical phenomena analysis to the ITN and develops a non-conservative dynamical model based on the gravity law that reproduces empirical features.

Findings

Log-normal distribution of link weights remains robust over 53 years

Universal power-law growth of trade strength with GDP observed

Shrinking size of the global rich-club controlling half of trade

Abstract

Tools of the theory of critical phenomena, namely the scaling analysis and universality, are argued to be applicable to large complex web-like network structures. Using a detailed analysis of the real data of the International Trade Network we argue that the scaled link weight distribution has an approximate log-normal distribution which remains robust over a period of 53 years. Another universal feature is observed in the power-law growth of the trade strength with gross domestic product, the exponent being similar for all countries. Using the 'rich-club' coefficient measure of the weighted networks it has been shown that the size of the rich-club controlling half of the world's trade is actually shrinking. While the gravity law is known to describe well the social interactions in the static networks of population migration, international trade, etc, here for the first time we studied a non-conservative dynamical model based on the gravity law which excellently reproduced many empirical features of the ITN.