International Trade and National Borders ∗

Since the Age of Discovery, the world has become economically integrated, while remaining politically disintegrated by national borders. We build a general equilibrium model of international trade and national borders across the world. Over a long time period, declining trade costs alter trade volumes across states but also incentivize states to redraw borders, generating political geography endogenously. Our model has significant implications for the global economy and politics. The patterns unraveled by our model are consistent with those shown by digitized world map data.