Jesse Schreger (Alesina Seminar)
Date and Time
Location
Speaker & Title
Jesse Schreger (Columbia), "Geoeconomic Pressure"
Abstract
Geoeconomic pressure—the use of existing economic relationships by governments to achieve geopolitical or economic goals—is a prominent feature of global power dynamics. This paper introduces a methodology using large language models (LLMs) to systematically identify the application of and response to geoeconomic pressure from large textual corpora. We classify which governments apply pressure to which foreign targets, using which instruments, firms, and products. We demonstrate that firms affected by tariffs respond primarily with price changes whereas firms affected by export controls respond disproportionately by investing in research and development. We document significant heterogeneity in how firms respond to pressure based on whether their home government is applying the pressure, whether their home country is the recipient of the pressure, or whether they are based in an affected third party country. Finally, we quantify the degree of measurement uncertainty generated by the LLM-based analysis by comparing the classifications across multiple open-weight models as well as considering a wide range of variations of our prompts.
Co-sponsored by FAS and IQSS, the Alberto Alesina Seminar on Political Economy supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies.
All interested faculty and students are invited to attend.