Structure and dynamics jointly stabilize the international trade hypergraph

TL;DR

This study uses a hypergraph model to analyze the structure and dynamics of international trade, revealing how certain correlations and decay rates influence the spread of trade collapses and system stability.

Contribution

It introduces a hypergraph framework to study trade fluctuations and demonstrates how structural correlations and dynamic decay rates jointly affect systemic stability.

Findings

Collapsed trades cluster and decay algebraically with trade volume

Positive degree-weight correlation suppresses global collapse

Recession periods weaken volume decay, increasing collapse spread

Abstract

To understand how fluctuations arise and are distributed in international trade, a question crucial for economic risk assessment and policymaking, we analyze strong adverse fluctuations-collapsed trades-defined as individual trades with sharp annual volume declines. Adopting a hypergraph framework for a fine-scale trade-centric representation of international trade, we find that collapsed trades (hyperedges) are clustered and their occurrence decays algebraically with trade volume (weight), which suggests inhomogeneous, epidemic-like spreading of collapse in the international trade hypergraph. Modeling collapse propagation as a contagion process and analyzing its dynamics, we show that a positive degree-weight correlation and a volume-decaying collapse rate synergistically suppress the onset of global collective collapse. Notably, the degree-weight correlation persisted but the volume-decay of the collapse rate weakened during the 2008-2009 global economic recession, resulting in a broader collapse spread. Our study shows how the interplay between structure and dynamics stabilizes complex systems.