The Capitalism and Freedom in the Twenty-First Century Podcast Matteo Maggiori on China, Geoeconomics and Exchange Rates | Hoover Institution
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Jan 8, 2026 In this engaging discussion, Matteo Maggiori, a prominent economist at Stanford and the Hoover Institution, shares insights from his journey from JP Morgan to academia. He delves into China's evolving capital markets and the impact of foreign investments on its global reputation. Matteo explains the concept of geoeconomics, discussing how nations utilize trade and finance as strategic tools. He also explores the challenges in measuring economic power, the influence of beliefs on investment portfolios, and the complexities of exchange rates in a global economy.
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Defining Geoeconomics As Economic Statecraft
- Geoeconomics is using trade and finance ties as instruments of statecraft to achieve political goals.
- Modern economic models let us formalize threats, participation constraints, and measure geoeconomic power.
Quantify Power By Outside-Option Gaps
- Measure geoeconomic power by the gap between an actor's inside option and its threatened outside option.
- Use expenditure shares and substitution elasticities as sufficient statistics to quantify impact.
AI Unlocks Firm-Level Geoeconomic Signals
- Text analysis and AI let researchers extract firm-level responses to sanctions and controls from corporate communications.
- This approach reveals costs and adjustments firms undertake in reaction to geoeconomic shocks.
