John Becko (Alesina Seminar)

See the seminar's full schedule here: Alberto Alesina Seminar on Political Economy

Today's Speaker

John Becko (Princeton), "Strategic (Dis)Integration"

Abstract

Suppose a country anticipates that it may use trade as a point of leverage in future geopolitical conflicts. How should it develop domestic industries and international trading relationships today in order to strengthen its hand tomorrow? Domestically, we show that the country abstains from peacetime industrial policies if it can credibly threaten trade taxes as geopolitical punishments during conflict, but not otherwise. Internationally, peacetime trade policy promotes the accumulation of foreign capital that makes foreign prices—not foreign welfare—more sensitive to trade during conflict. We apply these insights to provide the first quantitative exploration of the US’s optimal policies for building geopolitical power vis-à-vis China. The optimal policy promotes US-China trade on both the import and export margins.

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.

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See the seminar's full schedule at the Alesina Seminar page.

All interested faculty and students are invited to attend.