American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
International Friends and Enemies
American Economic Journal: Macroeconomics
vol. 16,
no. 4, October 2024
(pp. 350–85)
Abstract
We examine whether, as countries become more economically dependent on a trade partner, they realign politically toward that trade partner. We use network measures of economic exposure to foreign productivity growth derived from the class of trade models with a constant trade elasticity. We establish causality using two different sources of quasi-experimental variation: China's emergence into the global economy and the reduction in the cost of air travel over time. In both cases, we find that increased economic friendship causes increased political friendship and that our theory-based network measures dominate simpler measures of trading relationships between countries.Citation
Kleinman, Benny, Ernest Liu, and Stephen J. Redding. 2024. "International Friends and Enemies." American Economic Journal: Macroeconomics, 16 (4): 350–85. DOI: 10.1257/mac.20220223Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- E23 Macroeconomics: Production
- F14 Empirical Studies of Trade
- F15 Economic Integration
- F53 International Agreements and Observance; International Organizations
- O19 International Linkages to Development; Role of International Organizations
- P33 Socialist Institutions and Their Transitions: International Trade, Finance, Investment, Relations, and Aid
There are no comments for this article.
Login to Comment