International Friends and Enemies

Stephen Redding, Benny Kleinman and Ernest Liu

No 15068, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We develop sufficient statistics of countries' bilateral income and welfare exposure to foreign productivity shocks that are exact for small shocks in the class of models with a constant trade elasticity. For large shocks, we characterize the quality of the approximation, and show it to be almost exact. We compute these sufficient statistics for over 140 countries from 1970-2012. We show that our exposure measures depend on market-size, cross-substitution and cost of living effects. As countries become greater economic friends in terms of welfare exposure, they become greater political friends in terms of United Nations voting and strategic rivalries.

Keywords: Productivity growth; Trade; Welfare (search for similar items in EconPapers)
JEL-codes: F14 F15 F50 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (17)

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Related works:
Journal Article: International Friends and Enemies (2024)
Working Paper: International Friends and Enemies (2022)
Working Paper: International friends and enemies (2020)
Working Paper: International friends and enemies (2020)
Working Paper: International Friends and Enemies (2020)
Working Paper: International Friends and Enemies (2020)
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