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Economic interdependence

About: Economic interdependence is a research topic. Over the lifetime, 1357 publications have been published within this topic receiving 33469 citations.


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01 Oct 1992
TL;DR: In this paper, stylized facts on fiscal policies and international economic interdependence are presented, including the pure wealth effect, the distortionary tax incentives, and the international spillovers of tax policies.
Abstract: Part 1 Prologue: stylized facts on fiscal policies and international economic interdependence. Part 2 Traditional approaches to fiscal policies and international economic interdependence: the income-expendiuture model - fiscal policies and the determination of output fiscal policies and international capital mobility and the income-expenditure model. Part 3 Elements of intertemporal macroeconomics: the composite-commodity world the multiple-good world. Part 4 An intertemporal approach to fiscal policies in the world economy: government spending budget deficits with nondistortionary taxes - the pure wealth effect an exposition of the two-country overlapping-generations model. Part 5 Distortionary tax incentives - concepts and applications: equivalence relations in international taxation budget deficits with distortionary taxes fiscal policies and the real exchange rate capital income taxation in the open economy. Part 6 Stochastic fiscal policies: international stock markets and fiscal policy. Part 7 International spillovers of tax policies - a simulation analysis: spillover effects of international VAT harmonization spillover effects of budget deficits.

269 citations

Journal ArticleDOI
TL;DR: The authors showed that trade does not reduce conflict, though conflict reduces trade, and that both trade and conflict are influenced by nations' sizes and the distance separating them, so these fundamental exogenous factors must be included in models of conflict as well as trade.
Abstract: Two studies question whether economic interdependence promotes peace, arguing that previous research has not adequately considered the endogeneity of trade. Using simultaneous equations to capture the reciprocal effects, they report that trade does not reduce conflict, though conflict reduces trade. These results are puzzling on logical grounds. Trade should make conflict less likely, ceteris paribus, if interstate violence adversely affects commerce; otherwise, national leaders are acting irrationally. In re-analyzing the authors’ data, this article shows that trade does promote peace once the gravity model is incorporated into the analysis of conflict. Both trade and conflict are influenced by nations’ sizes and the distance separating them, so these fundamental exogenous factors must be included in models of conflict as well as trade. One study errs in omitting distance when explaining militarized disputes. The other does not adequately control for the effect of size (or power). When these theoreticall...

253 citations

Journal ArticleDOI
TL;DR: In this article, the authors discuss the literature that covers another intensively debated issue and which attempts to assess the relationship between trade and interstate conflict and show that trade will have a negligible and, in the perspective of one important model at least, even an amplifying effect on conflict.
Abstract: 'Globalization' has largely superseded the term 'economic interdependence' to describe the rapidly growing links between nations, economies, and societies. The effects that the internationalization of the world system has on social equality, the environment, and economic growth are, however, still largely disputed. In this article, we discuss the literature that covers another intensively debated issue and which attempts to assess the relationship between trade and interstate conflict. Although liberal economists maintain that economic interdependence exerts an unconditionally pacifying influence on interstate relations, we show that the most recent formal work expects that trade will have a negligible and, in the perspective of one important model at least, even an amplifying effect on conflict. Much empirical work, by contrast, supports the claim that the relationship between trade and conflict is direct and not mitigated by contextual factors. We review the different controversies on the link between economic interdependence and militarized disputes and outline some major challenges that have not yet been adequately dealt with in the scientific study of war and peace.

246 citations

Journal ArticleDOI
TL;DR: This paper examined the relationship between domestic politics and international cooperation and found that democracies are more likely to ally with each other, and states of any similar regime type are more than likely to cooperate with one another.
Abstract: The connection between domestic politics and international cooperation, specifically the relationship between regime type and alliance behavior, is examined to test two central hypotheses: democracies are more likely to ally with each other, and states of any similar regime type are more likely to ally with each other. These hypotheses emerge from three theories: constructivism, economic interdependence, and credible commitments. The authors use a data set of all pairs of states from 1816 to 1992. Results show that states with similar regime type are more likely to ally with each other after 1945, although two democracies are not more likely to ally than two autocracies during this period, and distance, learning, threat, and common culture affect alliance behavior, but trade does not. Results indicate sharp limits to the connection between democracy and international cooperation.

243 citations

Journal ArticleDOI
TL;DR: The authors examined the long-term impact of war on dyadic trade and found that war does not have a significant impact on trading relationships and that trade often increases in the postwar period.
Abstract: Current debates over the question of whether economic interdependence promotes peace or contributes to international conflict are often framed in terms of the 'paradigm wars' between liberal and realist theory. In spite of their differences, most liberal and realist theories of interdependence and conflict agree that trade and other forms of economic interchange between societies will cease or be substantially reduced once states are engaged in serious forms of conflict with each other, particularly after the outbreak of war. Liberal theories generally assume that political leaders are deterred from engaging in conflict when they anticipate that conflict will disrupt or eliminate trade or adversely affect the terms of trade, so the hypothesis that trade deters war rests on the assumption that war impedes trade. Realist theories suggest that the concern over relative gains will lead at least one of the belligerents to terminate trade in order to prevent its adversary from using the gains from trade to increase its relative military power. Contrary to these predictions, there are numerous historical examples of trade between adversaries that continues during wartime. Our aim here is to examine this phenomenon more systematically by conducting an empirical analysis of the short-term and long-term impact of war on trade for seven dyads in the period since 1870. Applying an interrupted time-series model, we find that in most cases war does not have a significant impact on trading relationships. Although war sometimes leads to a temporary decline in the level of dyadic trade, in most instances war has no permanent long-term effect on trading relationships and, in fact, trade often increases in the postwar period. This empirical anomaly in both liberal and realist theories of interdependence and conflict leads us to conclude that both theories need to be reformulated.

242 citations


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Performance
Metrics
No. of papers in the topic in previous years
YearPapers
202315
202227
202129
202022
201936
201834