Search Results
Working Paper
Technology, Geopolitics, and Trade
We study how geopolitical shocks reshape innovation through the contractual structure of cross-border technology adoption. Empirically, royalty flows are more sensitive than goods trade to geopolitical distance, especially where intellectual property enforcement is weak. We build a growth-trade model in which political risk raises breach hazards in licensing contracts. Firms reprice royalties but compliant adoption declines, and innovation incentives respond to the joint evolution of price and quantity. Quantitatively, fragmentation reallocates innovation and lowers the balanced-growth path ...
Working Paper
Technology, Geopolitics, and Trade
We study when unilateral export controls are optimal by quantifying how geopolitical rivalry reshapes trade in ideas. Empirically, cross-border technology flows are far more sensitive than goods trade to geopolitical distance, especially where IPR is weak, and these penalties intensify after 2017. Motivated by this evidence, we build a growth–trade model in which geopolitical distance raises breach risk in licensing; firms partially reprice risk via higher royalties but cannot fully insure quantities. In a consumption-only benchmark, a permanent rise in US–China geopolitical distance ...
Working Paper
Technology, Geopolitics, and Trade
We study when unilateral export controls are optimal by quantifying how geopolitical rivalry reshapes trade in ideas. Empirically, cross-border technology flows are far more sensitive than goods trade to geopolitical distance, especially where IPR is weak, and these penalties intensify after 2017. Motivated by this evidence, we build a growth–trade model in which geopolitical distance raises breach risk in licensing; firms partially reprice risk via higher royalties but cannot fully insure quantities. In a consumption-only benchmark, a permanent rise in US–China geopolitical distance ...
Trade Wars, Tech Rivalry and Geopolitical Tensions
An analysis of 'geopolitical distance' and exports highlights the links between geopolitical alignment and access to U.S. technology and goods.
Journal Article
Measuring Geopolitical Fragmentation: Implications for Trade, Financial Flows, and Economic Policy
Recent geopolitical tensions have revived interest in understanding the economic consequences of geopolitical fragmentation. Using bilateral trade flows, portfolio investment data, and detailed records of economic policy interventions, we revisit widely used geopolitical distance metrics, specifically the ideal point distance (IPD) derived from United Nations General Assembly voting. We document substantial variability in measured fragmentation, driven significantly by methodological choices related to sample periods and vote categories, especially in the wake of Russia’s 2022 invasion of ...
Working Paper
How Times Have Changed: The Impact of the 2026 Iran War on the U.S. Economy
The 2026 Iran war has raised the question of how exposed the U.S. economy is to geopolitical oil supply disruptions. It is widely believed that the U.S. economy has become less vulnerable to such disruptions as it has reduced its dependence on oil and changed from a major net oil importer to a net oil exporter. We develop a two-country model of the global economy with large geopolitical oil supply disruptions that distinguishes between the U.S. economy and the rest of the world. We find that the response of U.S. real GDP growth to the disruption in global oil supplies today is only ...
U.S. economy less vulnerable to geopolitical oil price shocks than in the past
Recent Federal Reserve Bank of Dallas research shows that the response of U.S. real (inflation-adjusted) GDP growth to the 2026 Iran war is only one-twentieth of what it would have been in 1980. Moreover, the response of U.S. real GDP growth today is only one-sixth of the decline in the rest of the world.
Working Paper
Technology, Geopolitics, and Trade
We study how geopolitical fragmentation shapes cross-border technology licensing and innovation incentives. We show that bilateral royalty flows vary with geopolitical distance differently from goods trade, and that this relationship depends on intellectual property enforcement. To interpret these facts, we develop a growth-trade model in which geopolitical risk weakens licensing enforceability when intellectual property rights are poorly protected. Royalty payments reflect both technology adoption and licensing prices: weaker enforcement can reduce diffusion while inducing firms to reprice ...
Working Paper
Geopolitical Distance and Targeted Trade: Evidence from Product-Level Export Controls
Trade policy in advanced economies is closely intertwined with concerns about technology and geopolitical rivalry. Using product-level data on export-related trade interventions, we characterize how contemporary export-side interventions are allocated across products, destinations, and bilateral trade relationships. We show that export controls are broad in regulatory scope but economically concentrated on high-value trade flows. Export controls disproportionately target high-technology products and economically important trade relationships, while geopolitical distance shapes their ...