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International Geopolitics

Author

Listed:
  • Ben Li

    (Boston College)

  • Penglong Zhang

    (Boston College)

Abstract

Since the Age of Discovery, the world has grown integrated economically while remaining disintegrated politically as a collection of nation-states. The nation-state system is robust because borders, as state dividers, interact with economic integration to absorb shocks. We build a tractable general equilibrium model of international trade and national borders in the world. Over a longer time horizon, declining trade costs alter trade volumes across states but also incentivize states to redraw borders, causing states to form, change, and dissolve. Our model offers significant implications for the global economy and politics, including trade patterns, political geography, its interplay with natural geography, state-size distribution, and the risks of militarized disputes. These implications are supported by modern and historical data.

Suggested Citation

  • Ben Li & Penglong Zhang, 2016. "International Geopolitics," Boston College Working Papers in Economics 909, Boston College Department of Economics, revised 06 Feb 2017.
    • Handle: RePEc:boc:bocoec:909
    Note: Previously circulated as "Trade and Geopolitics"
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    More about this item

    Keywords

    nation-state; endogenous borders; militarized disputes; trade costs;
    All these keywords.

    JEL classification:

    • N40 - Economic History - - Government, War, Law, International Relations, and Regulation - - - General, International, or Comparative
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General

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