Opinion formation in the world trade network

TL;DR

This paper studies opinion formation in the World Trade Network by treating countries as agents with a trade currency preference (TCP) and evolving these preferences through an asynchronous Monte Carlo process informed by bilateral trade flows. It couples this dynamics with Google-matrix and REGOMAX analyses to reveal both direct and indirect intergroup trade couplings among core blocs (ANGL.US, BRICS+, and EUR) and to quantify the shifting influence of currencies over 2010–2020. In a two-currency setting, the BRICS+- pegged BRI currency tends to dominate, producing two attractor states for the final USD fraction and a swing group whose size shrinks over time; extending to three currencies stabilizes the EUR bloc as a major influencer. The work demonstrates de-dollarization tendencies in the WTN and provides a data-driven, network-theoretic framework for assessing how macroeconomic blocs shape global trade through both direct ties and indirect pathways.

Abstract

We extend the opinion formation approach to probe the world influence of economical organizations. Our opinion formation model mimics a battle between currencies within the international trade network. Based on the United Nations Comtrade database, we construct the world trade network for the years of the last decade from 2010 to 2020. We consider different core groups constituted by countries preferring to trade in a specific currency. We will consider principally two core groups, namely, 5 Anglo-Saxon countries which prefer to trade in US dollar and the 11 BRICS+ which prefer to trade in a hypothetical currency, hereafter called BRI, pegged to their economies. We determine the trade currency preference of the other countries via a Monte Carlo process depending on the direct transactions between the countries. The results obtained in the frame of this mathematical model show that starting from year 2014 the majority of the world countries would have preferred to trade in BRI than USD. The Monte Carlo process reaches a steady state with 3 distinct groups: two groups of countries preferring, whatever is the initial distribution of the trade currency preferences, to trade, one in BRI and the other in USD, and a third group of countries swinging as a whole between USD and BRI depending on the initial distribution of the trade currency preferences. We also analyze the battle between USD, EUR and BRI, and present the reduced Google matrix description of the trade relations between the Anglo-Saxon countries and the BRICS+.

Figures (19)

• Figure 1: World distribution of the trade currency preferences for the years 2010 (top) and 2019 (bottom). The countries belonging to the USD group and the BRI group are colored in blue and red, respectively. Those belonging to the swing group are colored in green. Countries colored in grey have no trade data reported in the UN Comtrade database for the considered year comtrade. The world distribution of trade currency preferences for 2012, 2014, 2016, 2018 and 2020 are presented in Fig. \ref{['figA1']}.
• Figure 2: World distribution of the probability $P_\$$ that a country choose USD as its trade currency for 2010 (left) and 2019 (right), and for $f_{i}^{\rm USD}=0.1$ (top), $0.5$ (center) and $0.9$ (bottom). The colors range from red for countries which always have a TCP for BRI ($P_\$=0$) to blue for countries which always have a TCP for USD ($P_\$=1$). Countries colored in grey have no trade data reported in the UN Comtrade database for the considered year comtrade.
• Figure 3: Final fraction $f_{f}^{\rm USD}$ of countries with a trade currency preference for USD versus the initial fraction $f_{i}^{\rm USD}$ of these countries for years 2010 (left panel) and 2019 (right panel). There are two possible final fractions for each considered year: $f_{f_{1}}^{\rm USD} = 0.21$ and $f_{f_{2}}^{\rm USD} = 0.61$ in 2010, and $f_{f_{1}}^{\rm USD} = 0.18$ and $f_{f_{2}}^{\rm USD} = 0.45$ in 2019. The color of the points represents the ratio of Monte Carlo process with the corresponding final state $\rho_{f_{f}}(f_{i})$, low ratio in cold blue and high ration in violet. The central panel shows evolution of $\rho_{f_{f}}(f_{i})$ with $f_{i}$. The red (blue) curve and the up (down) triangles denote the minimal (maximal) final state. The full (empty) symbols correspond to the year 2019 (2010).
• Figure 4: Time evolution of the size of the trade currency preference groups. The width of a given band corresponds to the corresponding fraction of world countries in a TCP group (left panel) and to the corresponding fraction of the total trade volume generated by this group (right panel). The USD group is colored in blue, the BRI group in red, and the swing group in green. Within the BRI (USD) group, the proportion corresponding to the BRICS+ (the ANGL countries) is shown in dark red (dark blue).
• Figure 5: Reduced Google matrix $G_{\rm R}$ and its components for the ANGL countries and the BRICS+ and for the year 2010: $G_{\rm R}$ (top left), $G_{\rm pr}$ (top right), $G_{\rm rr}$ (bottom left) and $G_{\rm qr}$ (bottom right). For the $G_{\rm qr}$ matrix the relative weight of negative elements is $(W_{+} - W_{-}) / (W_{+} + W_{-}) = 0.31$, where $W_{+}$ and $W_{-}$ are respectively the mean of positive and negative elements (in absolute value).