In the last months we have seen several moves between Greece and Turkey in the economic field.

Specifically, the steps were mostly unilateral that is to say Greek investments (especially financial institutions).




What connotation does the crowd have with this developments ?

Specifically, do you think that interdependencies might lead to beneficial developments in different sectors ?

Inter dependance is good. Both parties have a stake and it creates incentive to keep things cool. If only one country have dependance (us on thier bank or them on our money) this can be no good. The other party can cut of support or use the dependance against them in a veriety of means.

Overall, yes I believe that more inter-investment between us is positive in many ways.

We might in a first step try to differentiate between specific characteristics of possible trade flows:

1. flow to overall flow ratio

2. quality (significance the product/service has for the (survival of the) economy, this includes, amongst others, also the availability of other suppliers and the overall dependence )

3. current flow to future flow ratio

4. distance between countries


In a nutshell, we have time, depth, volume and distance.

why should a leader/nation wage war. So to say, can we assume that he, the leader, is rational, trying to follow the best interest of his nation.
How can one measure this so called best interest in a objective manner ?


In any case, we assume he is rational, even if this word itself is contingently not concise.


So we start with point 1:

1.flow to overall flow ratio

- the lower the ratio --> the lower the interdependence --> the lower the incentive to not wage war ? Since the breakup of trade relations wouldnt affect the economy in a especially detrimental way. Of course, we let the war effect itself undiscussed.

Greece can't invest too heavily in Turkey's economy-not until Cyprus is resolved and the Generals in Turkey stop their aggressive attitudes.

Point 2:

2. quality

Quality might be measured by taking, at least, the following into account: the effect/importance a service/product has on a specific value chain, the number of value chains it affects and the ability of the receiver country to replace the s/p without hurting the economy.

It might be asked whether a country with a rational leadership wouldnt even be encouraged to intervene in the sender´s country affairs when it sees its economic interests hurt, assuming that the product is of a given importance and other factors speak also for the intervention (country size comparison/...).

Point 3:

3. current flow to future flow ratio

Leaving aside, the other points, one could come to the conclusion that a current flow that doesnt seem to be durable, might equally diminish seemingly the counterincentive to war.

The question here might be: What could lead to a change in trade flow ?

Point 4:

4.distance

It is to see that the distance between countries is not necessarily in a specific correlation, since weapons can be developed to compensate the distance.
On the other hand, goods/services that only under specific circumstances are tradeable might lose their advantage in relation to other products, so that point 3 could become valid again.