The dramatic economic and financial measures taken by the United States and its allies in response to Russia’s attack on Ukraine point up the potency but also the limits of economic power. The International Monetary Fund forecasts that asset seizures, financial sanctions, oil embargoes, and bans on sales of military hardware, oil drilling equipment and commercial airliner parts to Russia will cause the country’s economy to contract by 9 percent in 2022. This loss of income is three times the fall experienced by Russia in 2020 due to COVID-19. It is hard to imagine a more striking demonstration of the power of economic sanctions. Yet there are no visible signs of this intervention inducing the Kremlin to halt its war on Ukraine or even to modify its prosecution of the war. What exactly is economic power, then, and how can it be simultaneously so potent and ineffectual?
Barry Eichengreen is George C. Pardee and Helen N. Pardee Professor of Economics and Political Science at the University of California, Berkeley. He is a Research Associate of the National Bureau of Economic Research and Research Fellow of the Centre for Economic Policy Research.
Professor Eichengreen will receive the Nessim Habif World Prize the following day at the University of Geneva, awarded every year on a rotating basis by the Faculty of Arts, Faculty of Science or Faculty of Medicine at the University of Geneva and the Geneva Graduate Institute to an academic who has displayed original and profound thinking and work in the fields of natural, medical or human sciences.
This lecture will be introduced and moderated by Cédric Tille, Professor of International Economics.