Globalization? Trade war? A counterbalance perspective

Hu, Arthur and Hu, Xingwei and Tong, Hui (2022): Globalization? Trade war? A counterbalance perspective.

Abstract

The embrace of globalization and protectionism among economies has ebbed and flowed over the past few decades. These fluctuations call for quantitative analytics to help countries improve their trade policies. Changing attitudes about globalization also imply that the best trade policies may vary over time and be country-specific. We argue that the imports and exports of all economies constitute a counterbalanced network where conflict and cooperation are two sides of the same coin. Quantitative competitiveness is then formulated for each country using a network counterbalance equilibrium. A country could improve its relative strength in the network by embracing globalization, protectionism, trade collaboration, or conflict. This paper presents the necessary conditions for globalization and trade wars, evaluates their side effects, derives national bargaining powers, identifies appropriate targets for conflict or collaboration, and recommends fair resolutions for trade conflicts. Data and events from the past twenty years support these conditions.

• Item Type: MPRA Paper
• Language: English
• Keywords: globalization; trade war; counterbalance equilibrium; national competitiveness; bargaining power; authority distribution
• Subjects: C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C71 - Cooperative Games; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C78 - Bargaining Theory ; Matching Theory; F - International Economics > F1 - Trade > F11 - Neoclassical Models of Trade; F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; F - International Economics > F1 - Trade > F15 - Economic Integration; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy ; Factor Movement Policy ; Foreign Exchange Policy

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