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Trade policy in the shadow of war: A quantitative toolkit for geoeconomics

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  • Thoenig, Mathias

Abstract

This paper presents a quantitative toolkit for investigating the interplay between international trade and interstate war. A generic modeling framework is first constructed based on two core elements: (i) a structural gravity model of trade and (ii) a game of diplomatic negotiation that aims to deescalate geopolitical tensions and prevent armed conflicts. Methodologically, the setup extends the conventional quantitative procedures of trade policy evaluation to incorporate conflict risk. A series of empirically relevant scenarios is then simulated to assess the welfare gains of trade in a context of heightened conflict risk. Finally, the framework is used to structure a survey of the existing literature on trade and war.

Suggested Citation

  • Thoenig, Mathias, 2023. "Trade policy in the shadow of war: A quantitative toolkit for geoeconomics," CEPR Discussion Papers 18419, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18419
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    More about this item

    JEL classification:

    • F1 - International Economics - - Trade
    • F5 - International Economics - - International Relations, National Security, and International Political Economy

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