A Dynamic Model of International Relations Focused on Geopolitical Shifts and their Economic Implications

Abstract

This paper discusses the connection between geopolitics and economic influences in terms of a dynamic model of international relations. In case the balance of power between countries varies due to the development of the actively interlinked world, the changing of the balance of power between countries can be considered highly influential to the development of trade structures, investments and economic stability. Nevertheless, it should be noted that these processes are characterized by non-linearity and, thus, require special attention in order to be considered thoroughly. For that reason, this study will introduce the concept of dynamic modeling of international relations which involves taking into account the time component as well as the feedback mechanism and mutual influence of political and economic systems. The proposed research will be conducted through the use of a mixed methodology study when the qualitative assessment of the documents will be combined with the quantitative evaluation of the secondary data on trade flows and foreign direct investment. The result indicates that global economic systems are becoming increasingly dominated by selective interdependence, rather than globalization, whereby countries pursue strategies aimed at achieving both economic integration and resiliency. In addition, the study also defines a strong difference in the way the various areas respond to the changes that occur in geopolitics as compared to the developing regions. The paper concludes that geopolitical shifts, and economic dynamics are very interrelated and can be learned through dynamic and systems approach. This approach can offer a more profound idea of the changes that occurred on a global level and will result in a more accurate comprehension of the future risks and opportunities. The implications of the findings on policy makers are evident in that in an age where geopolitical uncertainty is on the rise, there is a lot that can be done by policy makers in order to come up with robust economic policies.