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Entropy-based analysis and bioinformatics-inspired integration of global economic information transfer

PLoS One. 2013;8(1):e51986. doi: 10.1371/journal.pone.0051986. Epub 2013 Jan 2.

Abstract

The assessment of information transfer in the global economic network helps to understand the current environment and the outlook of an economy. Most approaches on global networks extract information transfer based mainly on a single variable. This paper establishes an entirely new bioinformatics-inspired approach to integrating information transfer derived from multiple variables and develops an international economic network accordingly. In the proposed methodology, we first construct the transfer entropies (TEs) between various intra- and inter-country pairs of economic time series variables, test their significances, and then use a weighted sum approach to aggregate information captured in each TE. Through a simulation study, the new method is shown to deliver better information integration compared to existing integration methods in that it can be applied even when intra-country variables are correlated. Empirical investigation with the real world data reveals that Western countries are more influential in the global economic network and that Japan has become less influential following the Asian currency crisis.

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • Algorithms
  • Computational Biology / methods*
  • Computer Simulation
  • Data Collection
  • Data Interpretation, Statistical*
  • Germany
  • Italy
  • Models, Economic*
  • Models, Statistical

Grants and funding

This work was supported by National Research Foundation of Korea funded by the Ministry of Education, Science and Technology (Grant No. 2011-0009963 to SY and Grant No. 2012R1A2A4A01008475 to SY). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.