Economic Geography, Trade, and War

Abstract

An agent-based model in which economic exchange and military conflict are emergent processes is used to explore the relationship between trade and war. The model of exchange is an applied analysis of the economics of trading networks. The model of conflict treats war as a breakdown in interstate bargaining due to incomplete information. The simulations explore how initial economic geography, state revisionism, defensive advantage, and technological advancement akin to globalization affect both trade and war. The results show that the relationship between trade and war depends on third factors, and an inverse relationship between trade and war emerges from compact geographies with revisionist states.