Economic Vulnerability

Economic Vulnerability

Economic Vulnerability and International Trade Economy

In relation to international trade economy, Christopher Mark (1993) provided the following definition of Economic Vulnerability: In the context of trade relations, the proportion of a country's GNP accounted for by exports and imports is sometimes interpreted as a measure of its vulnerability to foreign events and economic conditions. (It is also used as a measure of economic “interdependence” with other states.) Since countries generally try to avoid being subject to the leverage of their suppliers, many make efforts to diversify their supply sources, even at the cost of higher prices. Political relationships with trading partners are an imponant element in determining vulnerability, since even a high level of trade dependence on a friendly ally is likely to create less vulnerability than trade with unfriendly states.



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