Exploring Economic Conflict Through the Gravitational Field Model of Trade: Markets, Wars, and Instability

Abstract

Building on Walter Isard's location and gravity theories in economics, we extend his trade model to better understand its core principles, including commercial attraction, center of gravity in markets, and favorable location for exporting firms. This extended model highlights the importance of trade agreements, free trade zones, and markets for national development. Additionally, we incorporate concepts of peace and conflicts in economics, applying these to trade and integrating them with the idea of gravitational fields in economics. Regarding this, we develop an analysis based on NUTS2. Our refined theory of conflict for markets suggests that competing states can develop either military or political strategies to counteract the positive effects of their adversaries' markets and international trade.