In a stark display of their economic power following Russia’s invasion of Ukraine, the United States and its allies deployed an array of sanctions aimed at curtailing Russia’s access to global financial markets and industrial supply chains. These unprecedented economic sanctions are intended to diminish the resources Russia has available to prosecute its war. While the moves have demonstrated a high degree of allied cooperation, they have also heightened debate about the relative effectiveness of economic measures aimed to induce peaceful behavior or to deter hostilities vs. as punishment for aggression after the fact.
On this episode of The Zeitgeist, AICGS President Jeff Rathke and Peter Rashish, Director of the AICGS Geoeconomics Program, discuss economic power with Barry Eichengreen, George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at University of California, Berkeley. How effective are economic sanctions? Is there a risk that U.S. and allied economic power will diminish as countries seek to develop alternatives to the current international order and its economic and financial institutions? Would nearshoring or friendshoring increase U.S. economic power? And can the U.S. and like-minded countries still craft policies toward China that incentivize mutually beneficial interdependence?