Abstract
The interdependent nature of the global economy has become stronger with increases in international trade and investment. We propose a new model to reconstruct the international trade network and associated cost network by maximizing entropy based on local information about inward and outward trade. We show that the trade network can be successfully reconstructed using the proposed model. In addition to this reconstruction, we simulated structural changes in the international trade network caused by changing trade tariffs in the context of the government’s trade policy. The simulation for the FOOD category shows that import of FOOD from the US to Japan increase drastically by halving the import cost. Meanwhile, the simulation for the MACHINERY category shows that exports from Japan to the US decrease drastically by doubling the export cost, while exports to the EU increased.
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Acknowledgements
The present study was supported by the Ministry of Education, Science, Sports, and Culture, Grants-in-Aid for Scientific Research (B), Grant no. 17KT0034 (2017–2019) and Exploratory Challenges on Post-K computer (Studies of Multi-level Spatiotemporal Simulation of Socioeconomic Phenomena).
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Ikeda, Y., Iyetomi, H. Trade network reconstruction and simulation with changes in trade policy. Evolut Inst Econ Rev 15, 495–513 (2018). https://doi.org/10.1007/s40844-018-0110-0
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DOI: https://doi.org/10.1007/s40844-018-0110-0