Geoeconomics and Rethinking the Logic of Trade

Finance & Development has published a five-paper symposium on “Geoeconomics” (June 2026)., which is the idea that in a global economy, national security policy needs to be incorporated into economic policy-making. Christopher Clayton, Matteo Maggiori, and Jesse Schreger contribute “Understanding Geoeconomics in a Volatile World.” They write: The academic study of geoeconomics dates most prominently to 1945, when economist Albert Hirschman published National Power and the Structure of Foreign Trade. In it, he examines how Nazi Germany had structured its economy to maximize leverage over its neighbors during the interwar period. He rejected the naive view that because trade is voluntary and mutually beneficial, it is geopolitically harmless. Benefits can be mutual, Hirschman argues, without being symmetrical. And asymmetry is how power builds. Since Hirschman’s time, economists have left the study of global power dynamics largely to political scientists and historians, who have led the…