Economic Interdependence

Definition

Economic interdependence is a system where different regions or countries rely on each other for resources, goods, or services. This mutual dependence often leads to international trade and globalization.

Analogy

Think of economic interdependence like a potluck dinner. Each guest brings a dish (or resource) that they specialize in making. Everyone at the party benefits from the variety of dishes (resources), and no one has to make everything themselves.

Related terms

Trade Barriers: These are measures that governments or public authorities introduce to make imported goods or services less competitive than locally produced goods and services.

Globalization: The process by which businesses or other organizations develop international influence or start operating on an international scale, driven by international trade and investment.

Supply Chain: A network between a company and its suppliers to produce and distribute a specific product to the final buyer.