Template-Type: ReDIF-Article 1.0

Author-Name: Eszter Boros
Author-Workplace-Name: Government Debt Management Agency
Author-Email: boros.eszter@akk.hu
Author-Person:

Author-Name: Tamas Ginter
Author-Workplace-Name: Magyar Nemzeti Bank, Andrassy University Budapest
Author-Email: gintert@mnb.hu
Author-Person:

Title: A Three-Bloc Structure of the World Economy: Evidence of Geoeconomic Fragmentation in International Trade, Financial and Military Data

Abstract: Geoeconomic fragmentation has received much attention by scholars in recent
years. The hypothesis that such fragmentation is taking place carries the assumption
that distinct geopolitical blocs exist. Many studies include presumptions on the
number and exact composition of these blocs, which vary largely in the literature.
Taking stock of the different approaches reveals a considerable lack of effort to
define blocs on an empirical basis. To narrow this gap, we aim to check the existence
of different country groups in a data-driven manner. We apply hierarchical clustering
to a broad set of geopolitically relevant data. Our results reveal a sensible three-bloc
structure of the world economy, with these blocs centred around major geopolitical 
 powers: the United States, the European Union, and a China-Russia conglomerate,
respectively. While our results corroborate the commonly applied East-West divide,
the finding that the two major Western geopolitical actors form separate blocs
challenges the existing consensus.

Classification-JEL: F02, F12, F50
Keywords: geoeconomic fragmentation, geopolitical blocs, hierarchical clustering
Pages: 65-91
Volume: 25
Issue: 2
Year: 2026
File-URL: https://hitelintezetiszemle.mnb.hu/sw/static/file/fer-25-2-st1-boros-ginter.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:25:y:2026:i:2:p:65-91