Autarky and Openness — Reflections on the Optimal Balance of an Open Economy

Abstract Following a surge in globalisation in the wake of the fall of the Iron Curtain and China joining the WTO, the international division of labour has been increasingly characterised by protectionist tendencies in recent years. Negative labour market effects for individual sectors as well as the disruptions of cross-border supply chain relations during the COVID-19 pandemic and the Ukraine war have strengthened the desire in parts of the population to reduce export- and, even more so, import-dependency. This article discusses some basic theoretical considerations on the optimal degree of openness of an economy — and thus also on the ideal degree of economic autarky.