Economics & Global Affairs

David Kearn argues that even in the absence of restrictive resource and budgetary constraints, a focus on identifying and achieving concrete objectives that will position the United States and its allies to effectively deter aggression in critical regional flashpoints should be the priority given the stressed nature of the defense industrial base and the nuclear enterprise.

Power transitions affect a state’s ability to exercise economic statecraft. As a dominating and a rising power approach parity, they face structural incentives to decouple their economies. This decoupling affects business-state relations: high-value businesses within the dominant power tend to oppose their state’s economic statecraft because of its costs to them, whereas low-value businesses within the rising power tend to cooperate because they gain from it. 

Economic interdependence has long been considered important to international peace. Questions about harmful effects of the free flow of capital, however, are arising. China and Organization for Economic Co-operation and Development countries are increasingly involving their business firms in security and intelligence work, causing a security dilemma dynamic that increases economic competition.

Last week, U.S. Sen. Joe Manchin seemingly dashed Democrats’ hopes for congressional action to slow climate change. Sen. Bernie Sanders accused Manchin of “sabotag[ing] the president’s agenda”; Rep. John Yarmuth, when asked about the consequences of Congress not acting on climate change, said, “We’re all going to die”; and climate activists, as well as some Democrats in Congress, wondered if Manchin should be removed as chair of the Senate Energy and Natural Resources Committee.

Do not be surprised if, later this month, there is a wave of headlines claiming that the US economy is in recession. But such an assessment would depend on a chain of reasoning that has three important flaws, writes Jeffrey Frankel.

For many, integrating “decarbonization” into public policy, corporate and financial strategies has become a requirement, not an option — yet, what happens when the critical link between climate stability and decarbonization breaks?

In this policy brief, we consider the existing mechanism of tax credits. We see how they can encourage private sector risk-taking to enable research and development (R&D) outcomes. However, our goal is to go beyond economic growth benefits, and to include the less tangible considerations of public good and public purpose in the research and development domain. We then suggest an expansion of tax credits focused on supporting the researchers involved in the R&D and encouraging innovation in both large organizations and in startups and small businesses. This approach builds upon the existing framework of agency-led, mission-defined support of the private sector used by the U.S. government, as occurs in other programs such as America’s Seed Fund (sometimes known by its acronyms, SBIR and STTR). The integration of specific agency- and mission-focused elements to the credit system ensures that these additive credits support research and researchers whose R&D outcomes will improve the health, prosperity, and opportunity for the U.S. as a whole.

It is a critical first step that the financial policymakers of the United States have acknowledged the need for a CBDC, but that realization is not enough. 

The Economic Diplomacy Initiative (EDI) at the Belfer Center for Science and International Affairs is presenting a first-of-its-kind analysis of the makeup of the Commerce Department’s Entity List, by country, by sector, and by year of addition. Starting with raw data made available by the Commerce Department, we manually grouped blacklisted sub-entities at the parent level to give a clearer view of the companies targeted by export controls. While  the Entity List does not include industry tags, we used Federal Register announcements and secondary research to manually assign industry sectors to each entity. The analysis provides a quantitative review of the evolving use of the entity list to shed light on shifting aims of US economic and national security policy.

Whereas the Trump administration worked effectively with Europe in some areas, including energy security and law enforcement, the U.S-EU relationship disintegrated in many other areas, above all in trade following U.S. tariffs on imports of aluminum and steel and threats to restrict car imports. While some members of the United Kingdom’s Conservative Party have appreciated President Trump’s endorsement of Brexit, the core interests of the United Kingdom (including free trade, the fight against climate change and defense of multilateral institutions) diverge from those of the Trump administration.

The next U.S. administration will face the challenge of re-engaging with Europe on matters of joint concern, not only on climate and Iran but also on concluding a trade agreement, resolving outstanding economic disputes and leading efforts to reform the World Trade Organization (WTO).