{
  "title": "World Rethinks Geoeconomic Calculus in a More Contested Era",
  "publication": "IMF Blog, June 2, 2026",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2026/06/03/the-geoeconomic-calculus",
  "canonical": "https://www.imf.org/en/blogs/articles/2026/06/03/the-geoeconomic-calculus",
  "overlayPath": "/en/blogs/articles/2026/06/03/the-geoeconomic-calculus/index.md",
  "summary": "Economic thinking must evolve to account for a shift in how nations pursue security, growth, and influence",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Publication: Finance & Development blog entry by Gita Bhatt, dated June 2, 2026.\n- Central thesis: Economic thinking must evolve to account for a shift in how nations pursue security, growth, and influence as geoeconomics—use of tariffs, sanctions, and export controls for national security—becomes more prevalent.\n- Key observation: The line between economic and national security policy is blurring, ushering in a new era of geoeconomics."
    },
    {
      "heading": "Historical context and perspective",
      "content": "- Geoeconomics is not new: For many countries—from Brazil to India to Türkiye—it has long been the norm (noted by Josh Lipsky).\n- Recent change: The world’s largest economy is increasingly employing geoeconomic tools, amplifying global consequences."
    },
    {
      "heading": "Analytical framework and mechanisms of geoeconomic power",
      "content": "- Authors and contributions cited:\n  - Christopher Clayton, Matteo Maggiori, and Jesse Schreger: provide a new analytical framework.\n- Core findings:\n  - Control of choke points—such as financial infrastructure, technology, or critical commodities—can confer immense power.\n  - Overuse of geoeconomic power is self-defeating: it drives other nations to seek alternatives and erodes the leverage being wielded.\n- Policy implication from framework:\n  - Need for policy tools that allow limited intervention to enhance economic security while preserving benefits of globalization."
    },
    {
      "heading": "Costs, benefits, and trade-offs",
      "content": "- Jeffry Frieden: economic coercion imposes costs on efficiency, innovation, credibility, and domestic cohesion.\n- Kim Ruhl: enhancing geoeconomic resilience is essential even if it reduces efficiency; the US must adopt tariffs, sanctions, and industrial strategies to respond to nonmarket actions by adversaries.\n- Common theme: Resilience matters—but so does restraint.\n  - Excessive dependence = vulnerability.\n  - Excessive fragmentation = jeopardizes economic benefits from cooperation.\n- Challenge articulated: Strike a balance—diversify and cooperate where possible, preserve institutions that make power predictable rather than arbitrary."
    },
    {
      "heading": "Implications for middle powers and regions",
      "content": "- Gedion Timothewos (Ethiopia’s foreign minister): Sub-Saharan African countries face declining aid and a crumbling multilateral peace architecture, but can find leverage in the global race for Africa’s critical minerals.\n- N. K. Singh: Middle powers such as India can shape the emerging order by building issue-based coalitions.\n- Beatrice Weder di Mauro: Europe should stop thinking of itself as a middle power and start acting like a great power in proportion to its economic heft.\n- Multilateral system challenge:\n  - Aaditya Mattoo, Michele Ruta, and Robert Staiger: Geopolitical competition need not end trade cooperation, but requires rethinking the rules to avoid disruptive trade wars and protect neutral countries."
    },
    {
      "heading": "Policy recommendations and strategic guidance",
      "content": "- Adopt limited, targeted interventions to enhance economic security while preserving globalization’s benefits.\n- Build resilience through diversification and cooperation, avoiding both excessive dependence and fragmentation.\n- Middle powers should form issue-based coalitions to increase influence.\n- Major economies should exercise restraint to prevent overuse of leverage that prompts countermeasures and fragmentation.\n- Multilateral institutions must adapt rules to accommodate geopolitical rivalry while protecting trade cooperation and neutral states."
    },
    {
      "heading": "Conclusion and outlook",
      "content": "- Geoeconomics likely represents a durable shift in how nations pursue security, growth, and influence.\n- Economic thinking and policy must evolve with real-world experience to navigate an increasingly volatile world.\n- Editorial note: The author was saddened by the passing of Robert Skidelsky, who submitted an article to F&D shortly before his death in April, aged 86.\n\nSource: Gita Bhatt, \"World Rethinks Geoeconomic Calculus in a More Contested Era\", June 2, 2026 — https://www.imf.org/en/blogs/articles/2026/06/03/the-geoeconomic-calculus\n\n---\n\n Content in this bundle\n\n- fd-june26-geoeconomics\n  - fd-june26-geoeconomics (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - fd-june26-geoeconomics (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- This issue of Finance & Development\n- Josh Lipsky\n- Christopher Clayton, Matteo Maggiori, and Jesse Schreger\n- Jeffry Frieden\n- Kim Ruhl\n- Gedion Timothewos\n- N. K. Singh\n- Beatrice Weder di Mauro\n- Aaditya Mattoo, Michele Ruta, and Robert Staiger\n- Robert Skidelsky\n\nSource: https://www.imf.org/en/blogs/articles/2026/06/03/the-geoeconomic-calculus"
    }
  ],
  "bullets": [
    "[Markdown version](/en/blogs/articles/2026/06/03/the-geoeconomic-calculus/index.md)",
    "[Structured JSON version](/en/blogs/articles/2026/06/03/the-geoeconomic-calculus/index.json)",
    "[Bundle manifest](/en/blogs/articles/2026/06/03/the-geoeconomic-calculus/bundle-manifest.json)",
    "Authors: Gita Bhatt",
    "Published: June 2, 2026",
    "Publication: Finance & Development blog entry by Gita Bhatt, dated June 2, 2026.",
    "Central thesis: Economic thinking must evolve to account for a shift in how nations pursue security, growth, and influence as geoeconomics—use of tariffs, sanctions, and export controls for national security—becomes more prevalent.",
    "Key observation: The line between economic and national security policy is blurring, ushering in a new era of geoeconomics.",
    "Geoeconomics is not new: For many countries—from Brazil to India to Türkiye—it has long been the norm (noted by Josh Lipsky).",
    "Recent change: The world’s largest economy is increasingly employing geoeconomic tools, amplifying global consequences.",
    "Authors and contributions cited:",
    "Core findings:",
    "Policy implication from framework:",
    "Jeffry Frieden: economic coercion imposes costs on efficiency, innovation, credibility, and domestic cohesion.",
    "Kim Ruhl: enhancing geoeconomic resilience is essential even if it reduces efficiency; the US must adopt tariffs, sanctions, and industrial strategies to respond to nonmarket actions by adversaries.",
    "Common theme: Resilience matters—but so does restraint.",
    "Challenge articulated: Strike a balance—diversify and cooperate where possible, preserve institutions that make power predictable rather than arbitrary.",
    "Gedion Timothewos (Ethiopia’s foreign minister): Sub-Saharan African countries face declining aid and a crumbling multilateral peace architecture, but can find leverage in the global race for Africa’s critical minerals.",
    "N. K. Singh: Middle powers such as India can shape the emerging order by building issue-based coalitions.",
    "Beatrice Weder di Mauro: Europe should stop thinking of itself as a middle power and start acting like a great power in proportion to its economic heft.",
    "Multilateral system challenge:",
    "Adopt limited, targeted interventions to enhance economic security while preserving globalization’s benefits.",
    "Build resilience through diversification and cooperation, avoiding both excessive dependence and fragmentation.",
    "Middle powers should form issue-based coalitions to increase influence.",
    "Major economies should exercise restraint to prevent overuse of leverage that prompts countermeasures and fragmentation.",
    "Multilateral institutions must adapt rules to accommodate geopolitical rivalry while protecting trade cooperation and neutral states.",
    "Geoeconomics likely represents a durable shift in how nations pursue security, growth, and influence.",
    "Economic thinking and policy must evolve with real-world experience to navigate an increasingly volatile world.",
    "Editorial note: The author was saddened by the passing of Robert Skidelsky, who submitted an article to F&D shortly before his death in April, aged 86.",
    "**fd-june26-geoeconomics**",
    "[This issue of Finance & Development](https://www.imf.org/en/publications/fandd)",
    "[Josh Lipsky](https://www.imf.org/en/publications/fandd/issues/2026/06/geoeconomics-rediscovered-josh-lipsky)",
    "[Christopher Clayton, Matteo Maggiori, and Jesse Schreger](https://www.imf.org/en/publications/fandd/issues/2026/06/understanding-geoeconomics-in-a-volatile-world-matteo-maggiori)",
    "[Jeffry Frieden](https://www.imf.org/en/publications/fandd/issues/2026/06/the-cost-of-geoeconomic-coercion-jeffry-frieden)",
    "[Kim Ruhl](https://www.imf.org/en/publications/fandd/issues/2026/06/point-of-view-rethinking-free-trade-kim-ruhl)",
    "[Gedion Timothewos](https://www.imf.org/en/publications/fandd/issues/2026/06/point-of-view-africa-in-a-fractured-world-gedion-timothewos)",
    "[N. K. Singh](https://www.imf.org/en/publications/fandd/issues/2026/06/point-of-view-the-middle-power-moment-n-k-singh)",
    "[Beatrice Weder di Mauro](https://www.imf.org/en/publications/fandd/issues/2026/06/point-of-view-europes-power-paradox-beatrice-weder-di-mauro)",
    "[Aaditya Mattoo, Michele Ruta, and Robert Staiger](https://www.imf.org/en/publications/fandd/issues/2026/06/trade-cooperation-in-an-age-of-geopolitics-aaditya-mattoo)",
    "[Robert Skidelsky](https://www.imf.org/en/publications/fandd/issues/2026/06/keynes-for-our-times-robert-skidelsky)"
  ],
  "related": [
    {
      "title": "fd-june26-geoeconomics",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2026/06/fd-june26-geoeconomics.pdf",
      "summary": {
        "path": "/-/media/files/publications/fandd/article/2026/06/fd-june26-geoeconomics.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/files/publications/fandd/article/2026/06/fd-june26-geoeconomics.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/blogs/articles/2026/06/03/the-geoeconomic-calculus/index.md",
    "json": "/en/blogs/articles/2026/06/03/the-geoeconomic-calculus/index.json",
    "bundleManifest": "/en/blogs/articles/2026/06/03/the-geoeconomic-calculus/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-08-28T18:10:29.969Z"
}