Statistical mechanics of the international trade network

Details Statistical mechanics of the international trade network Statistical mechanics of the international trade network

2011-04-13

arxiv.org/abs/1104.2606v1

Economy

Quantitative Finance

General Finance

5 pages, 2 figures

Scientific paper

Analyzing real data on international trade covering the time interval 1950-2000, we show that in each year over the analyzed period the network is a typical representative of the ensemble of maximally random weighted networks, whose directed connections (bilateral trade volumes) are only characterized by the product of the trading countries' GDPs. It means that time evolution of this network may be considered as a continuous sequence of equilibrium states, i.e. quasi-static process. This, in turn, allows one to apply the linear response theory to make (and also verify) simple predictions about the network. In particular, we show that bilateral trade fulfills fluctuation-response theorem, which states that the average relative change in import (export) between two countries is a sum of relative changes in their GDPs. Yearly changes in trade volumes prove that the theorem is valid. Supported by the well-known qualitative findings about economic crises, we argue that the theorem provides valuable quantitative insights into the mechanisms underlying the emergence of worldwide crises.

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