GEOPOLITICAL AND ECONOMIC FACTORS INFLUENCE ON GLOBAL ECONOMY’S FRAGMENTATION

Abstract

Introduction. This article examines the geopolitical and economic factors influence on global economic fragmentation—a contemporary process that is counterproductive to the global economy integration and globalization. This study is valuable for identifying the potential global economic fragmentation impact on development and forecasting its future prospects. Materials and methods. This article provides the approaches overview to studying global economic change, beginning with the classical approaches formulated by A. Smith and D. Ricardo and also A. Marshall’s and L. Walras’s neoclassical approaches. These theories are compared with Keynesian and neoinstitutional approaches to studying global economic change, including fragmentation processes. The categories «integration» and «fragmentation» definitions also are formulated. The global fragmentation reasons of and its consequences are graphically presented. Research results. The authors describe the global fragmentation causal component, focusing on such aspects as political conflicts and sanctions (through geopolitical uncertainty index examination since the 21st century beginning); protectionist policies (through monitoring changes in foreign trade flows and average energy prices). They also present data confirming a trend of declining trust in integration associations across borders, which indirectly indicates a decline in the international organizations effectiveness and their existing system as a whole. It is specifically noted that fragmentation manifests itself not only in the technological and macroeconomic spheres but also in the global financial architecture. Data on inflation, GDP, and public debt are provided. The authors conclude that a transition from a global financial architecture to a more diversified, but more conflict-prone model is underway. Discussion and conclusion. The global fragmentation analysis factors conducted in this study leads to the conclusion that this trend is intensifying in the modern world. This reflects the transition from a universal world order to a fragmented, multilevel system in which strategic autonomy and flexible alliances are becoming key tools for survival and competitiveness