Global dynamics of GDP and trade

TL;DR

This paper models the economic growth and trade dynamics of the top six economies using logistic equations, predicting maximum growth levels and durations, and analyzing their interrelation through a dynamical system.

Contribution

It introduces a novel dynamical systems approach to model and compare GDP and trade growth across major economies, revealing distinct growth patterns.

Findings

Predicted maximum GDP and trade growth values for each country.

Identified two types of economies based on the power law exponent.

Established the phase solutions of GDP and trade as a second-order dynamical system.

Abstract

We use the logistic equation to model the dynamics of the GDP and the trade of the six countries with the highest GDP in the world, namely, USA, China, Japan, Germany, UK and India. From the modelling of the economic data, which are made available by the World Bank, we predict the maximum values of the growth of GDP and trade, as well as the duration over which exponential growth can be sustained. We set up the correlated growth of GDP and trade as the phase solutions of an autonomous second-order dynamical system. GDP and trade are related to each other by a power law, whose exponent seems to differentiate the six national economies into two types. Under conducive conditions for economic growth, our conclusions have general validity.