Macro Musings with David Beckworth Matteo Maggiori and Jesse Schreger on Geoeconomics and its Policy Implications
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Dec 4, 2023 Matteo Maggiori and Jesse Schreger, along with David Beckworth, discuss geoeconomics and its policy implications. They explore the basics and core concepts of geoeconomics, the key elements of a global hegemon, and real world examples. They also discuss China's influence on the entertainment industry, debt repayment, US financial sanctions, and the future of geoeconomics research and policy agenda.
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Iran Deal Reversal And Later Sanctions
- The US withdrew from the Iran nuclear deal in 2017 and later used its influence to isolate Iran economically.
- Europeans resented U.S. unpredictability, then welcomed U.S. leadership when sanctions on Russia followed.[1363.800-1393.240]
Cross-Domain Dominance Matters
- Hegemony requires dominance across multiple domains, not just one strategic input.
- Ability to combine market scale, finance, and inputs gives the strongest coercive leverage.
Network Effects Amplify Influence
- Thick-market externalities amplify hegemonic leverage because adoption decisions are interdependent.
- Targeting sectors with network effects yields outsized global impact relative to private costs.