Theoretical and Applied Economics (Mar 2023)
An economic analysis of trade war and deglobalization in current international relations within the paradigm of globalization
Abstract
The purpose of the article is on the deglobalization processes currently taking place in international economic interactions, and also attempts to examine how the trade blocs of the major economies affect the rest of globalization. The Kinked Exponential Model was used to determine decadal growth rates based on 31 years of panel data from 1990 to 2020 for 15 large countries (gross domestic product). Three different regression models i.e., Pooled OLS, Fixed- and Randomeffect models were estimated to examine the effects of trade blocs and wars between nations on the world economy. Over the study period, disparities and increasing economic inequality between variables have widened. In addition, international conflicts have had a negative impact on international trade and have significantly affected globalization. More importantly, trade blocs, particularly the OECD, APEC, and BRICS have slowed trade with the rest of the world, reflecting a process known as regionalization, in which countries cooperate rather than at the global level. In particular, during the third decade of the twentieth century, when the growth rate of trade flows among major countries declined rapidly by 8.8 per cent, this regionalization did not stop and expanded significantly.
