Economy – Quantitative Finance – General Finance
Scientific paper
2007-07-30
J. Stat. Mech. (2008) P02002
Economy
Quantitative Finance
General Finance
5 pages, 5 figures
Scientific paper
10.1088/1742-5468/2008/02/P02002
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.
Bhattacharya Kaushik
Kaski Kimmo K.
Manna Smarajit
Mukherjee Gangabrata
Saramaki Jari
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