This paper introduces a new trade model type. It combines the gravity model, well-known in international economics, with network theory. With this approach, complicated trade networks can be algebraically solved in form of systems of linear (differential) equations. Business cycles and...

In this paper, we develop a network perspective on the welfare gains from trade in today's internationally fragmented supply chains. Towards this end, we study a Ricardian trade model featuring trade in final and intermediate products, and introduce a novel comparative statics approach to...

This paper proposes a new quantitative implementation of Balassa's idea that export composition and revealed comparative advantage inform the relationship between endowments in domestic factors of production and exports. It proposes that the export composition of countries is close to a...

Firm-to-firm connections in domestic and international production networks play a fundamental role in economic outcomes. Firm heterogeneity and the sparse nature of firm-to-firm connections implicitly discipline network structure. We find that a large group of well-established statistical...

The global food and agricultural trade network is crucial for food security. Shocks such as those posed by extreme weather events, conflicts, pandemics, and economic crises can test the resilience of the trade network to the sudden interruption of trade flows. Depending on the level of...

We reconsider Goyal and Moraga-Gonzalez (Rand J. of Econ. 32 (2001), 686-707) model of strategic networks in order to analyze how government policies (e.g. subsidies) will affect the stability and efficiency of networks of R&D collaboration among three firms located in different countries. A...

The paper examines the formation of free trade agreements (FTAs) as a network formation game. We consider a general n-country model in which countries trade differentiated industrial commodities as well as a numeraire good. Countries may be different in the size of the industrial good industry...

We examine how trade sanctions can be imposed effectively in a trading network. We focus on three factors that affect trade sanctions: a country’s endowment, distance between trading countries, and connectivity in the network. Our models explain several empirical observations: (i) sanctions...