Article (Scientific journals)
Trade integration and trade imbalances in the European Union: a network perspective
Carpantier, Jean-Francois; Delvenne, Jean-Charles; Kriegs, Gautier
2014In PLoS ONE, 9 (1), p. 83448
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Abstract :
[en] We study the ever more integrated and ever more unbalanced trade relationships between European countries. To better capture the complexity of economic networks, we propose two global measures that assess the trade integration and the trade imbalances of the European countries. These measures are the network (or indirect) counterparts to traditional (or direct) measures such as the trade-to-GDP (Gross Domestic Product) and trade deficit-to-GDP ratios. Our indirect tools account for the European inter-country trade structure and follow (i) a decomposition of the global trade flow into elementary flows that highlight the long-range dependencies between exporting and importing economies and (ii) the commute-time distance for trade integration,which measures the impact of a perturbation in the economy of a country on another country, possibly through intermediate partners by domino effect. Our application addresses the impact of the launch of the Euro. We find that the indirect imbalance measures better identify the countries ultimately bearing deficits and surpluses, by neutralizing the impact of trade transit countries, such as the Netherlands. Among others, we find that ultimate surpluses of Germany are quite concentrated in only three partners. We also show that for some countries, the direct and indirect measures of trade integration diverge, thereby revealing that these countries (e.g. Greece and Portugal) trade to a smaller extent with countries considered as central in the European Union network.
Disciplines :
International economics
Author, co-author :
Carpantier, Jean-Francois ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA)
Delvenne, Jean-Charles;  Université Catholique de Louvain - UCL
Kriegs, Gautier;  Université Catholique de Louvain - UCL
Language :
English
Title :
Trade integration and trade imbalances in the European Union: a network perspective
Publication date :
2014
Journal title :
PLoS ONE
ISSN :
1932-6203
Publisher :
Public Library of Science, San Franscisco, United States - California
Volume :
9
Issue :
1
Pages :
e83448
Peer reviewed :
Peer Reviewed verified by ORBi
Available on ORBilu :
since 19 August 2014

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