How Free Trade Increases Peaceful Interaction Between Nations

August 12, 2021

A  recent study by Jong-Wha Lee and Ju Hyun Pyun  has found a strong correlation between trade and peace. Examination of a "large panel data set of 243,225 peer country observations" over 50 years "confirms that an increase in bilateral trade interdependence significantly promotes peace." But that's not all they found. Furthermore, and most importantly, they found that "the opening of world trade significantly promotes peace." This last effect is felt more in countries far away than in those that share borders.

This is significant empirical support for those who have argued that trade promotes peace along with prosperity. Whether Bastiat said it or not, many have contemplated the pacifying nature of trade, the altered incentives when the ability to access markets is available.