International Friends and Enemies

Benny Kleinman, Ernest Liu and Stephen Redding
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Benny Kleinman: Princeton University
Ernest Liu: Princeton University

Working Papers from Princeton University, Department of Economics, Center for Economic Policy Studies.

Abstract: We examine whether as countries become more economically dependent on a trade partner, they realign politically towards 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.

Keywords: international relations; trade; productivity growth; real income (search for similar items in EconPapers)
JEL-codes: F14 F15 F50 (search for similar items in EconPapers)
Date: 2022-03
New Economics Papers: this item is included in nep-cna, nep-int and nep-net
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Citations: View citations in EconPapers (1)

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https://gceps.princeton.edu/wp-content/uploads/2022/04/wp292_Redding-et-al.pdf

Related works:
Journal Article: International Friends and Enemies (2024)
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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Persistent link: https://EconPapers.repec.org/RePEc:pri:cepsud:292

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