140:
approach is based on both vertical and horizontal interdependence. Vertical interdependence measures how a change in the price of a good in
Country X will affect Country Y (or how changes in price in State A will affect State B), whilst horizontal interdependence calculates the degree of bilateral trade, transactions and investment involved between both countries. Both vertical and horizontal interdependence data must be used to measure economic interdependence. This is because that in the given situation that there is a high correlation of vertical interdependence between country X and country Y, if there is no horizontal interdependence (transaction of goods, services or capitals) between both countries, country X and country Y will have little/no economic interdependence. Vertical interdependence without horizontal may arise due to other factors such as changes in worldwide economic forces. For instance, consider the case of trade and the flow of factors among Arab states (which is typically very limited); whilst we observe parallel movements in factor prices, this may just be due to the effect of global market forces that affect all economies in the same fashion.
149:
whilst maintaining a systematic approach with many countries involved (a large-n analysis). Crescenzi addresses this by interacting bilateral price elasticity data with trade activity data, to represent both market structure and the intensity of potential economic exit costs. Whilst the price elasticity data reflects one state's ability to react to economic change that is initiated by another state, its interaction with trade share data is vital as it indicates how intense the interdependent relationship is relative to each state's economy and trade portfolio within the global market. Given these two components, Crescenzi furthers his study by explaining the relationship between economic interdependence and its association with political conflict.
131:
interaction between countries or states is most commonly measured by
Pearson's cross-correlation coefficient. The correlation matrix is a methodical method which exhibits the mutual relationship of countries over a specified time period. To measure growth clusters, economists need to get hold and analyse changes in GDP for each country over a specified period of time. The relationship between interdependence and business cycles is calculated by the distance correlation matrices over a period of 10 years. The combination of results from the data presents the economic interdependence of countries over time. By this measure, trends from the data has shown that the degree of world economic interdependence is growing due to globalisation.
98:
trade relations. According to
Stephen G. Brooks, globalization of production has had a pacifying impact on great powers by (i) making it hard for great powers to have cutting edge military technology without being part of global supply chains, (ii) reducing incentives to conquer the territory of economically advanced countries, and (iii) facilitating regional integration.
139:
Another way of measuring the degree of economic interdependence is via a geopolitical approach, which is based on the presumption that economic interdependence may exist because states trade with each other to obtain strategic goods that are needed for national industry and defence. The geopolitical
43:
incurred from potential exit costs that incur as a result of breaking existing economic ties between nations. Others argue that it entails the degree of sensitivity of a country's economic behavior to policies and development of countries outside its border. Global economic interdependence has grown
47:
Some international relations scholars posit that economic interdependence contributes to peaceful relations between states. Other scholars argue that the relationship is more nuanced or emphasize the ways in which interdependence can contribute to conflict between states. For example, through their
130:
increases the integration and interdependence between the economy of different countries. The
Hierarchical Network Approach is used to measure economic interdependence by analysing growth clusters and cross-country liaison, and business cycle synchronisations. The cross-country liaison or economic
97:
and
Patrick McDonald argue that interdependence creates groups in liberal capitalist states with vested interests in the status quo, which makes conflict less likely. However, illiberal states or states where domestic groups benefit from trade barriers may be more likely to end up in conflict over
73:
argues that expectations about future trade affects whether economic interdependence is likely to lead to peace or conflict; when leaders do not believe that future trade patterns will be favorable, they are more likely to engage in conflict and competition than when they believe that future trade
117:
As economic interdependence may be perceived differently depending on the scale and context involved, various methods are used to measure the degree of interdependence between and within countries. The below documents some of the approaches that have been adopted to measure the degree of economic
31:
who wrote: "...but in reality the economic system is a whole in which all of the parts are connected and react on one another. An increase in the income of the producers of commodity A will affect the demands for commodities B, C, etc. and the incomes of their producers, and by its reaction will
148:
As suggested by
Baldwin and Crescenzi, economic interdependence may be modelled as a function of potential economic exit costs, which may deter, motivate or fail to affect political conflict. A key challenge that is faced is the need for a valid method to measure exit costs and interdependence,
68:
International relations scholars are divided as to whether economic interdependence contributes to peace or conflict. Statistical analyses indicate that economic interdependence can lead both to war and peace, with various factors that condition the effect of interdependence.
26:
who trade in order to obtain the products they cannot produce efficiently for themselves. Such trading relationships require that the behavior of a participant affects its trading partners and it would be costly to rupture their relationship. The subject was addressed by
44:
in the post-World War II period as a result of technological progress (e.g. computerization, containerization, low-cost travel, low-cost communications) and associated policies that were aimed at opening national economies internally and externally to global competition.
105:
during a period of unprecedented globalization and economic interdependence has often been cited as an example of how economic interdependence fails to prevent war or even contributes to it. Other scholars dispute that World War I was a failure for liberal theory.
90:
argue that interdependence increase the risk of conflict by creating dependencies and vulnerabilities that states will seek to rid themselves off; for example, states will fear that other states cut off access to key resources.
899:
60:
has argued that economic interdependence in East Asia can both be a tool of coercion by China but can also be exploited by China's neighbors to deter China if they all work together against China.
82:, states can "weaponize interdependence" by fighting over control of important nodes in global networks of informational and financial exchange. Realists such as
56:
have outlined how states that possess effective jurisdiction over central economic nodes can use these nodes for coercive economic leverage against adversaries.
804:
Mcdonald, Patrick J.; Sweeney, Kevin (2007). "The
Achilles' Heel of Liberal Ir Theory? Globalization and Conflict in the Pre-World War I Era".
949:
651:
Grieco, Joseph M. (1988). "Anarchy and the Limits of
Cooperation: A Realist Critique of the Newest Liberal Institutionalism".
1180:
749:
716:
477:
401:
327:
177:
274:
109:
According to a 2005 assessment of existing research, the existing research indicated that trade linkages reduce conflict.
75:
53:
1081:
Blanchard, Jean-Marc F.; Ripsman, Norrin M. (1996). "Measuring economic interdependence: A geopolitical perspective".
363:
289:
271:
Globalization, Interdependence and
Sustainability. In Introduction to Sustainable Development – Volume 1
394:
Producing
Security: Multinational Corporations, Globalization, and the Changing Calculus of Conflict
28:
251:
855:
Rowe, David M. (2005). "The Tragedy of Liberalism How Globalization Caused the First World War".
102:
495:"Trading Communities, the Networked Structure of International Relations, and the Kantian Peace"
494:
32:
affect the demand for commodity A." Economic Interdependence is evidently a consequence of the
320:
The invisible hand of peace: capitalism, the war machine, and international relations theory
1039:
742:
A World Safe for Commerce: American Foreign Policy from the Revolution to the Rise of China
356:
Economic interdependence and international conflict: new perspectives on an enduring debate
169:
Economic Interdependence and International Conflict: New Perspectives on an Enduring Debate
430:"Trading on Preconceptions: Why World War I Was Not a Failure of Economic Interdependence"
8:
1116:
Rosecrance, Richard; Gutowitz, William (1981). "Measuring interdependence: a rejoinder".
1043:
429:
1141:
1063:
1029:
988:
927:
880:
837:
829:
722:
684:
676:
630:
622:
576:
522:
407:
233:
33:
996:
1145:
1133:
1098:
1055:
992:
980:
931:
919:
884:
872:
841:
821:
786:
745:
712:
688:
668:
634:
614:
580:
568:
526:
514:
473:
448:
397:
369:
359:
333:
323:
225:
173:
79:
49:
1067:
767:"Collective Resilience: Deterring China's Weaponization of Economic Interdependence"
237:
1125:
1090:
1047:
972:
964:
911:
864:
813:
778:
660:
606:
558:
506:
440:
217:
83:
70:
40:
467:
167:
94:
23:
597:
Mearsheimer, John J. (1994). "The False Promise of International Institutions".
547:"Weaponized Interdependence: How Global Economic Networks Shape State Coercion"
469:
Market Power Politics: War, Institutions, and Strategic Delay in World Politics
112:
1129:
1094:
915:
868:
817:
664:
221:
208:
Baldwin, David A. (1980). "Interdependence and power: a conceptual analysis".
1174:
1137:
1102:
1059:
984:
923:
876:
825:
790:
672:
618:
572:
518:
510:
452:
337:
229:
127:
87:
950:"Measuring Global Economic Interdependence: A Hierarchical Network Approach"
373:
726:
252:"UN DESA | Office for Economic and Social Council Support and Coordination"
39:
David Baldwin conceptualizes international economic interdependence as the
1051:
766:
411:
1034:
782:
563:
546:
444:
833:
1020:
Mantegna, R. N. (2012). "Hierarchical structure in financial markets".
976:
968:
680:
626:
57:
948:
Gomez, David Matesanz; Torgler, Benno; Ortega, Guillermo J. (2013).
610:
354:
Simmons, Beth (2003). "Pax Mercatoria and the Theory of the State".
16:
Mutual dependence of parties that trade within an economic system
113:
Approaches to measure international economic interdependence
74:
patterns will be beneficial to their state. According to
290:"World Trade Report 2008 (Trade in a Globalizing World)"
287:
63:
1161:
Economic Interdependence and Conflict in World Politics
900:"Commerce and Conflict: New Data about the Great War"
166:
Mansfield, Edward Deering; Pollins, Brian M. (2003).
22:is the mutual dependence of the participants in an
1115:
947:
195:Researches into the Mathematical Theory of Wealth
1172:
1080:
466:Gent, Stephen E.; Crescenzi, Mark J. C. (2021).
165:
121:
803:
711:. Princeton University Press. pp. 1–25.
544:
465:
197:. Translated by Nathaniel Bacon. p. 127.
596:
545:Farrell, Henry; Newman, Abraham L. (2019).
427:
126:This approach is based on the precept that
1158:
1033:
897:
562:
493:Lupu, Yonatan; Traag, Vincent A. (2012).
492:
1083:Geopolitics and International Boundaries
1019:
739:
706:
317:
134:
353:
268:
207:
192:
1173:
650:
646:
644:
391:
143:
48:work on "weaponized interdependence",
943:
941:
898:Gowa, Joanne; Hicks, Raymond (2017).
702:
700:
698:
592:
590:
540:
538:
536:
428:Gartzke, Erik; Lupu, Yonatan (2012).
423:
421:
64:Economic interdependence and conflict
904:British Journal of Political Science
854:
387:
385:
383:
349:
347:
313:
311:
309:
275:Encyclopedia of Life Support Systems
764:
641:
13:
1074:
938:
695:
587:
533:
418:
14:
1192:
380:
344:
306:
288:World Trade Organization (2008).
201:
709:Economic Interdependence and War
358:. University of Michigan Press.
172:. University of Michigan Press.
1152:
1109:
1022:The European Physical Journal B
1013:
891:
848:
797:
758:
733:
486:
459:
1159:Crescenzi, Mark J. C. (2002).
744:. Princeton University Press.
499:Journal of Conflict Resolution
396:. Princeton University Press.
322:. Princeton University Press.
281:
262:
244:
186:
159:
1:
152:
122:Hierarchical Network Approach
1181:International macroeconomics
7:
472:. Oxford University Press.
392:Brooks, Stephen G. (2005).
10:
1197:
1118:International Organization
740:Copeland, Dale C. (2024).
707:Copeland, Dale C. (2015).
653:International Organization
318:McDonald, Patrick (2009).
210:International Organization
1130:10.1017/S0020818300032586
1095:10.1080/13629379608407567
916:10.1017/S0007123415000289
869:10.1080/09636410500323153
818:10.1017/S0043887100020864
665:10.1017/S0020818300027715
222:10.1017/S0020818300018828
193:Cournot, Antoine (1838).
511:10.1177/0022002712453708
269:Paehlke, Robert (2009).
20:Economic interdependence
765:Cha, Victor D. (2023).
103:outbreak of World War I
771:International Security
599:International Security
551:International Security
437:International Security
1052:10.1007/s100510050929
135:Geopolitical Approach
783:10.1162/isec_a_00465
564:10.1162/isec_a_00351
445:10.2139/ssrn.1706942
1044:1999EPJB...11..193M
144:Exit Model Approach
1163:. Lexington Books.
969:10.1111/twec.12080
34:division of labour
963:(12): 1632–1648.
957:The World Economy
751:978-0-691-17255-2
718:978-0-691-16159-4
479:978-0-19-752982-9
403:978-0-691-13031-6
329:978-7-5097-9283-4
179:978-0-472-09827-9
118:interdependence.
80:Abraham L. Newman
41:opportunity costs
1188:
1165:
1164:
1156:
1150:
1149:
1113:
1107:
1106:
1078:
1072:
1071:
1037:
1035:cond-mat/9802256
1017:
1011:
1010:
1008:
1007:
1001:
995:. Archived from
954:
945:
936:
935:
895:
889:
888:
857:Security Studies
852:
846:
845:
801:
795:
794:
762:
756:
755:
737:
731:
730:
704:
693:
692:
648:
639:
638:
594:
585:
584:
566:
542:
531:
530:
505:(6): 1011–1042.
490:
484:
483:
463:
457:
456:
434:
425:
416:
415:
389:
378:
377:
351:
342:
341:
315:
304:
303:
301:
299:
294:
285:
279:
278:
266:
260:
259:
248:
242:
241:
205:
199:
198:
190:
184:
183:
163:
84:John Mearsheimer
71:Dale C. Copeland
1196:
1195:
1191:
1190:
1189:
1187:
1186:
1185:
1171:
1170:
1169:
1168:
1157:
1153:
1114:
1110:
1079:
1075:
1018:
1014:
1005:
1003:
999:
952:
946:
939:
896:
892:
853:
849:
802:
798:
763:
759:
752:
738:
734:
719:
705:
696:
649:
642:
611:10.2307/2539078
595:
588:
543:
534:
491:
487:
480:
464:
460:
432:
426:
419:
404:
390:
381:
366:
352:
345:
330:
316:
307:
297:
295:
292:
286:
282:
267:
263:
250:
249:
245:
206:
202:
191:
187:
180:
164:
160:
155:
146:
137:
124:
115:
66:
24:economic system
17:
12:
11:
5:
1194:
1184:
1183:
1167:
1166:
1151:
1124:(3): 553–556.
1108:
1089:(3): 225–246.
1073:
1028:(1): 193–197.
1012:
937:
910:(3): 653–674.
890:
863:(3): 407–447.
847:
812:(3): 370–403.
806:World Politics
796:
757:
750:
732:
717:
694:
659:(3): 485–507.
640:
586:
532:
485:
478:
458:
417:
402:
379:
364:
343:
328:
305:
280:
261:
243:
216:(4): 471–506.
200:
185:
178:
157:
156:
154:
151:
145:
142:
136:
133:
123:
120:
114:
111:
65:
62:
50:Abraham Newman
15:
9:
6:
4:
3:
2:
1193:
1182:
1179:
1178:
1176:
1162:
1155:
1147:
1143:
1139:
1135:
1131:
1127:
1123:
1119:
1112:
1104:
1100:
1096:
1092:
1088:
1084:
1077:
1069:
1065:
1061:
1057:
1053:
1049:
1045:
1041:
1036:
1031:
1027:
1023:
1016:
1002:on 2020-05-05
998:
994:
990:
986:
982:
978:
974:
970:
966:
962:
958:
951:
944:
942:
933:
929:
925:
921:
917:
913:
909:
905:
901:
894:
886:
882:
878:
874:
870:
866:
862:
858:
851:
843:
839:
835:
831:
827:
823:
819:
815:
811:
807:
800:
792:
788:
784:
780:
777:(1): 91–124.
776:
772:
768:
761:
753:
747:
743:
736:
728:
724:
720:
714:
710:
703:
701:
699:
690:
686:
682:
678:
674:
670:
666:
662:
658:
654:
647:
645:
636:
632:
628:
624:
620:
616:
612:
608:
604:
600:
593:
591:
582:
578:
574:
570:
565:
560:
556:
552:
548:
541:
539:
537:
528:
524:
520:
516:
512:
508:
504:
500:
496:
489:
481:
475:
471:
470:
462:
454:
450:
446:
442:
438:
431:
424:
422:
413:
409:
405:
399:
395:
388:
386:
384:
375:
371:
367:
365:0-472-09827-6
361:
357:
350:
348:
339:
335:
331:
325:
321:
314:
312:
310:
291:
284:
276:
272:
265:
257:
253:
247:
239:
235:
231:
227:
223:
219:
215:
211:
204:
196:
189:
181:
175:
171:
170:
162:
158:
150:
141:
132:
129:
128:globalisation
119:
110:
107:
104:
99:
96:
92:
89:
88:Joseph Grieco
85:
81:
77:
76:Henry Farrell
72:
61:
59:
55:
54:Henry Farrell
51:
45:
42:
37:
35:
30:
29:A. A. Cournot
25:
21:
1160:
1154:
1121:
1117:
1111:
1086:
1082:
1076:
1025:
1021:
1015:
1004:. Retrieved
997:the original
960:
956:
907:
903:
893:
860:
856:
850:
809:
805:
799:
774:
770:
760:
741:
735:
708:
656:
652:
602:
598:
557:(1): 42–79.
554:
550:
502:
498:
488:
468:
461:
436:
393:
355:
319:
296:. Retrieved
283:
270:
264:
255:
246:
213:
209:
203:
194:
188:
168:
161:
147:
138:
125:
116:
108:
100:
95:Beth Simmons
93:
67:
46:
38:
19:
18:
977:11336/28749
727:j.ctt7ztkw2
605:(3): 5–49.
1006:2019-12-10
412:j.ctt7sjz7
298:26 October
256:www.un.org
153:References
58:Viktor Cha
1146:155029854
1138:1531-5088
1103:1362-9379
1060:1434-6028
993:153947881
985:1467-9701
932:155842355
924:0007-1234
885:144723501
877:0963-6412
842:154331885
826:0043-8871
791:0162-2889
689:148193812
673:0020-8183
635:153472054
619:0162-2889
581:198952367
573:0162-2889
527:220643183
519:0022-0027
453:1556-5068
338:988390516
230:1531-5088
1175:Category
1068:16976422
834:40060163
374:51304096
277:(EOLSS).
238:10757441
1040:Bibcode
681:2706787
627:2539078
1144:
1136:
1101:
1066:
1058:
991:
983:
930:
922:
883:
875:
840:
832:
824:
789:
748:
725:
715:
687:
679:
671:
633:
625:
617:
579:
571:
525:
517:
476:
451:
410:
400:
372:
362:
336:
326:
236:
228:
176:
1142:S2CID
1064:S2CID
1030:arXiv
1000:(PDF)
989:S2CID
953:(PDF)
928:S2CID
881:S2CID
838:S2CID
830:JSTOR
723:JSTOR
685:S2CID
677:JSTOR
631:S2CID
623:JSTOR
577:S2CID
523:S2CID
433:(PDF)
408:JSTOR
293:(PDF)
234:S2CID
1134:ISSN
1099:ISSN
1056:ISSN
981:ISSN
920:ISSN
873:ISSN
822:ISSN
787:ISSN
746:ISBN
713:ISBN
669:ISSN
615:ISSN
569:ISSN
515:ISSN
474:ISBN
449:ISSN
398:ISBN
370:OCLC
360:ISBN
334:OCLC
324:ISBN
300:2015
226:ISSN
174:ISBN
101:The
86:and
78:and
52:and
1126:doi
1091:doi
1048:doi
973:hdl
965:doi
912:doi
865:doi
814:doi
779:doi
661:doi
607:doi
559:doi
507:doi
441:doi
218:doi
1177::
1140:.
1132:.
1122:35
1120:.
1097:.
1085:.
1062:.
1054:.
1046:.
1038:.
1026:11
1024:.
987:.
979:.
971:.
961:36
959:.
955:.
940:^
926:.
918:.
908:47
906:.
902:.
879:.
871:.
861:14
859:.
836:.
828:.
820:.
810:59
808:.
785:.
775:48
773:.
769:.
721:.
697:^
683:.
675:.
667:.
657:42
655:.
643:^
629:.
621:.
613:.
603:19
601:.
589:^
575:.
567:.
555:44
553:.
549:.
535:^
521:.
513:.
503:57
501:.
497:.
447:.
439:.
435:.
420:^
406:.
382:^
368:.
346:^
332:.
308:^
273:.
254:.
232:.
224:.
214:34
212:.
36:.
1148:.
1128::
1105:.
1093::
1087:1
1070:.
1050::
1042::
1032::
1009:.
975::
967::
934:.
914::
887:.
867::
844:.
816::
793:.
781::
754:.
729:.
691:.
663::
637:.
609::
583:.
561::
529:.
509::
482:.
455:.
443::
414:.
376:.
340:.
302:.
258:.
240:.
220::
182:.
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.