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Reconstructing the world trade multiplex: The role of intensive and extensive biases

Mastrandrea, Rossana and Squartini, Tiziano and Fagiolo, Giorgio and Garlaschelli, Diego Reconstructing the world trade multiplex: The role of intensive and extensive biases. Physical Review E, 90. 062804. ISSN 1539-3755 (2014)

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In economic and financial networks, the strength of each node has always an important economic meaning, such as the size of supply and demand, import and export, or financial exposure. Constructing null models of networks matching the observed strengths of all nodes is crucial in order to either detect interesting deviations of an empirical network from economically meaningful benchmarks or reconstruct the most likely structure of an economic network when the latter is unknown. However, several studies have proved that real economic networks and multiplexes topologically differ from configurations inferred only from node strengths. Here we provide a detailed analysis of the world trade multiplex by comparing it to an enhanced null model that simultaneously reproduces the strength and the degree of each node. We study several temporal snapshots and almost 100 layers (commodity classes) of the multiplex and find that the observed properties are systematically well reproduced by our model. Our formalism allows us to introduce the (static) concept of extensive and intensive bias, defined as a measurable tendency of the network to prefer either the formation of extra links or the reinforcement of link weights, with respect to a reference case where only strengths are enforced. Our findings complement the existing economic literature on (dynamic) intensive and extensive trade margins. More generally, they show that real-world multiplexes can be strongly shaped by layer-specific local constraints.

Item Type: Article
Identification Number: 10.1103/PhysRevE.90.062804
Subjects: Q Science > QC Physics
Research Area: Economics and Institutional Change
Depositing User: Caterina Tangheroni
Date Deposited: 05 Nov 2015 13:48
Last Modified: 08 Mar 2018 16:59
URI: http://eprints.imtlucca.it/id/eprint/2825

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