Editing Economic interdependence (section)

=== Geopolitical Approach ===
Another way of measuring the degree of economic interdependence is via a geopolitical approach, which is based on the presumption that economic interdependence may exist because states trade with each other to obtain strategic goods that are needed for national industry and defence. The geopolitical approach is based on both vertical and horizontal interdependence. Vertical interdependence measures how a change in the price of a good in Country X will affect Country Y (or how changes in price in State A will affect State B), whilst horizontal interdependence calculates the degree of bilateral trade, transactions and investment involved between both countries.<ref name=":2">{{Cite journal|title = Measuring economic interdependence: A geopolitical perspective|journal = Geopolitics and International Boundaries|date = 1996|issn = 1362-9379|pages = 225–246|volume = 1|issue = 3|doi = 10.1080/13629379608407567|first1 = Jean-Marc F.|last1 = Blanchard|first2 = Norrin M.|last2 = Ripsman}}</ref> Both vertical and horizontal interdependence data must be used to measure economic interdependence. This is because that in the given situation that there is a high correlation of vertical interdependence between country X and country Y, if there is no horizontal interdependence (transaction of goods, services or capitals) between both countries, country X and country Y will have little/no economic interdependence. Vertical interdependence without horizontal may arise due to other factors such as changes in worldwide economic forces. For instance, consider the case of trade and the flow of factors among Arab states (which is typically very limited); whilst we observe parallel movements in factor prices, this may just be due to the effect of global market forces that affect all economies in the same fashion.<ref>{{Cite journal|title = Measuring interdependence: a rejoinder|journal = International Organization|date = 1981|issn = 1531-5088|pages = 553–556|volume = 35|issue = 3|doi = 10.1017/S0020818300032586|first1 = Richard|last1 = Rosecrance|first2 = William|last2 = Gutowitz| s2cid=155029854 }}</ref>