relation: http://eprints.imtlucca.it/1461/
title: Stochastic Trade Networks
creator: Riccaboni, Massimo
creator: Schiavo, Stefano
subject: HB Economic Theory
subject: HF Commerce
description: This paper develops a simple network model to describe the dynamic of the intensive and extensive margin of international trade flows. The result is achieved by means of the combination of two mechanisms of proportional  growth: the first (discrete) determines the formation of trade links, the second (continuous) governs trade intensity. We show that our setup is able to simultaneously match a large number of empirical regularities, such as the  fraction of zero trade flows across pairs of countries or the high concentration of trade with respect to both products and destinations. Our findings suggest that stylized facts are strongly interconnected across different levels of aggregation of trade data , so that a unifying explanation is called for. By incorporating stochastic elements into standard trade models we can improve their ability to explain relevant facts about world trade.
publisher: IMT Institute for Advanced Studies Lucca
date: 2013-01
type: Working Paper
type: NonPeerReviewed
format: application/pdf
language: en
identifier: http://eprints.imtlucca.it/1461/1/EIC_WP_1_2013.pdf
identifier:   Riccaboni, Massimo and Schiavo, Stefano  Stochastic Trade Networks.  EIC working paper series  #1/2013    IMT Institute for Advanced Studies Lucca    ISSN 2279-6894.