International Friends and Enemies

Benny Kleinman, Ernest Liu and Stephen Redding

American Economic Journal: Macroeconomics, 2024, vol. 16, issue 4, 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.

JEL-codes: D72 E23 F14 F15 F53 O19 P33 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Related works:
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)
Working Paper: International Friends and Enemies (2020)
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DOI: 10.1257/mac.20220223

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