Economic Theory Commons^™

Economic Shocks, Trade And International Relations, Jack Barnes Thompson

Undergraduate Economic Review

In an interdependent world, trade has unavoidable game aspects. A model with two agents is used to determine the impact of trade and a military alliance between two major world players, North America and China, and an external non-actor, South Korea. The objective of this study is to investigate the impact of cooperative actions and outcomes by the two agents on a two-track policy for South Korea. We also study a variant to the game by considering a change in international relations. Welfare implications are also observed.