Tuck Knowledge in Practice Podcast: Being the Chief Economist

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Emily Blanchard: There are a bunch of questions, especially around economic security, that are very, very difficult to answer. They’re very messy problems to deal with. And I’ve come out with an almost evangelical zeal that we need to work on them anyway. And that’s what I plan to do. I’m going to get deeper in the trenches and work on some really hard things.

[Podcast introduction and music]

Kirk Kardashian: Hey, this is Kirk Kardashian and you’re listening to Knowledge and Practice, a podcast from the Tuck School of Business at Dartmouth. In this podcast, we talk with tuck professors about their research and teaching and the story behind their curiosity. Today on the show, I speak with Emily Blanchard, a trade economist, award winning teacher, and an associate professor of business administration. Her work explores how foreign investment and global value chains are changing the role of trade and international economic cooperation in the 21st century, and how globalization and education shape, political outcomes, and the distribution of income within and across countries. Emily recently returned to Tuck after a two-year term as the chief economist at the U.S. Department of State. I started our conversation by asking Emily how she got called up to the big leagues of the executive branch of the U.S. government.

Emily: So I got a call in the summer of 2021 from a former Dartmouth trustee, Jose Fernandez. Dartmouth 77. And it was completely out of the blue for me. And he mentioned that he was soon, he hoped to be confirmed by the Senate to be the undersecretary for Economic Growth, Environment and Energy at the US State Department. And he was looking for a chief economist. So of course, I was like, oh, boy, I could give you a whole bunch of names, thinking, wouldn’t it be neat if somebody I knew would be picked for that position? And it didn’t occur to me until he said so that he wanted me to take the role. Um, it was, of course, an enormous honor and a privilege to be asked. It was a bigger decision to decide to go. Um, but it was actually fairly easy. The personal side of things was challenging, for sure. And so, my family was a key part of the decision making, and we all talked about it for more than a week. How would we make this work? Uh, with the with the family moved to DC, all those sorts of logistical questions. Um, but I kind of knew I needed to do this. I’ve always wanted to engage in public service and had been waiting for an opportunity to do so. Um, this seemed like a good time. It was the beginning of an administration. An administration whose values I support. Uh, and frankly, a little bit more wonkily. This is just a fascinating time to be involved in international Economic policy and foreign policy.

This is, keep in mind, summer of 2021. It’s before Putin’s further brutal invasion of Ukraine. This was before, of course, Hamas’s deadly attack against, uh, Israel. Um, so some things had not yet come to pass, but already there were very important shifts going on, transpiring in US economic policy and the global economic environment we find ourselves in. Um, not least the growing economic competition between the US and China. So, I figured, how could I how could I not accept the invitation? Um, I went to Washington with two goals. One was to serve and the other was to learn. And those are maybe the best decision I made going into the role was having A very limited bucket list in terms of what I wanted to achieve. I will give my former self credit for knowing that I had no idea what I was about to face. Um, and so I just went into it with as much energy and excitement for the role as I could possibly muster. Another critical piece was, of course, the support from tuck. I talked to Dean, Brian Tomlin, I talked to my senior colleagues, of course, in economics at tuck and at the college. I talked to mentors of mine, and of course, I talked to our own dean, Matt Slaughter, who served in Washington as well. And all of them really encouraged me to take on this role and give it a go.

Kirk: I’d love to hear the inside scoop as much as possible about what it was like to be the chief economist at the State Department. It’s a big job. Um, what was the day to day like, and what were some of the main issues you were dealing with?

Emily: The day to day was fascinating. And how do I put this diplomatically? I guess I don’t. It was messy. So, I inherited an office that had been, for the most part, mothballed under the previous administration. So, I had the enormous job, but also, again, huge privilege to rebuild the office of the Chief economist for the State Department from the ground up. So first I had to understand an enormously complicated, powerful, but also sometimes frustratingly rigid government bureaucracy, which is the US Department of State. I also had to understand and navigate the US executive branch. So, there was a lot of internal institutional learning that I needed to do. But it was all quite fun because I was building at the same time, and I got to build with a mission of thinking from a fresh start What is it that us foreign policy makers, what is it that US diplomats need to know and understand about economics and economic policy? This is objectives. This is constraints. This is realities and options. And of course, above all tradeoffs that we need to be able and well positioned to, to make and to grapple with in this 21st century where we’re dealing with, gosh, all sorts of challenges climate change, emerging market debt, the increasing demands for inclusive economic growth within countries, not least, of course, the United States huge focus on building a foreign policy for the middle class, but also building economic inclusion critically globally, we have billions of people around the world that would be, would, would strive and are delighted and are in fact seeking citizenship or at least visas to work in the United States How do we provide the economic opportunities in place around the world? That’s a key diplomatic objective.

At the same time, we’re dealing with rising geopolitical competition, of course, with China. Very soon after I took office with Russia, Putin invaded Ukraine in February 2022. That was, shall we say, all-consuming in my office and for the State Department. As we grappled with the global economic spillovers, you had countries around the world suddenly lose access to critical food and fertilizer and vegetable oils and, of course, European colleagues losing access to piped natural gas. And what were we going to do about oil revenues that were funding Putin’s war machine? So, we got to grapple with all of these inside the department, but then also critically in the interagency policy making process. So, working very closely with the NSC, the National Security Council, with the white House Council of Economic Advisers, with the National Economic Commission, the NSC working with our colleagues at Treasury and Commerce.

So there was a huge amount of that kind of economic work, really, really fascinating. So, there were a lot of interagency meetings, a lot of departmental capacity building. And then the third piece and maybe the most fun piece, particularly as I grew a little bit more comfortable in my position and had a moment to start to think about more, more affirmative ways of engaging with the rest of the world. I began to travel a lot overseas, and so I got to visit as a US diplomat. I got to visit places all around the world, of course, key allies in Europe and in East Asia and elsewhere, but also critically, partners that are often flown over or less attended to. So, I went to Paraguay. I went to Angola. I went to Laos all around the world, trying to figure out what is it that the United States can deliver and offer to partners everywhere to increase their economic prosperity and build the kind of global economic system that works for everyone?

Speaker 3: Good evening. And we’re coming on the air at this hour with breaking news after the U.S. warned all day of a full-scale Russian invasion of Ukraine that it was imminent, Vladimir Putin has just addressed the Russian people moments ago, announcing what Putin called the start of a military special operation, in his words, to demilitarize Ukraine, that Russia.

Kirk: Can we drill down a bit into one of the issues that you may be tackled? Um, just to kind of hear some specifics. So, say, you know, the, the, the, the world losing access to grain from the Ukraine, from the invasion. How does your how does an economist how does your office deal with something like that? What are you trying to do and how are you how do you go about it.

Emily: Yeah. So, lots of different answers here. Um, part of the well, the first step is just understanding what we’re dealing with. So, in the very early, literally days after the invasion, we asked ourselves creatively, what are the kinds of economic disruptions around the world that we expect to see unfold from this crisis? Of course, we knew very quick look at any production data, and this one maybe is obvious to anybody who understands history. Ukraine is particularly important as a world producer of foodstuffs, of grains, of wheat, of vegetable oils. Um, and then also some critical fertilizer products and some of that’s from the Russian side of disruption as well. Um, so we looked at that and said, okay, food security is already an enormous concern around the world. We’re still coming out of the Covid pandemic. There are still a lot of supply chains that at that time, in early 2022, were still snarled. Where are we likely to see the shortages and shortfalls show up first? And so, we could look at patterns in the trade data. We could look at historical shipments and say we’re typically which countries around the world are the most likely to be importing the grain from Ukraine. And so, which of those contracts might not be fulfilled? Um, and then it was passing that information to colleagues in other parts of the State Department to say, okay, well, are there ways that we can assist that we can help rewire global trade networks, global flows of trade as quickly as possible? Um, another example.

Again, just an awareness of the data, the likely scope of the disruption and things that could potentially go forward as you look ahead. So, a lot of times we’re just trying to peer around corners and figure out what might be coming next. With global, any disruption in global food markets and food security, an immediate concern that we’ve seen play out in the past, sadly with devastating effect, is governments often begin to impose export restrictions. So, if you’re worried, for example, about how much food you’ll have available for your consumers, you might immediately say, well, the first thing we should do is make sure we don’t export any of our own foodstuffs. Well, if all countries around the world do that at once, you have a very quick escalation of shortages in global food markets because less product is trading. And so, if you think about it like a game of musical chairs, it’s as if a whole bunch of chairs have been pulled out all at once. People have pulled away their own chairs. And so, for the countries that do not have access to critical foodstuffs stocks from their domestic stores, they’re going to get caught out. So this was another place where our office could say, with the awareness of how things have played out in history, looking at the conditions that are likely to take place over the next few months, let’s immediately begin diplomatic efforts engaging with our allies, engaging with partners around the world to say, hey guys, let’s make sure that we keep global food markets open and operating.

There is enough food. A lot of this is a case of how do you get products from point A to point B? Because the immediate reaction, totally understandable, but hugely problematic, is for governments to hoard. So, we did that very successful. We saw very, very few export barriers put in place. And those that were put in place were typically removed very quickly as governments realized this is not working well for us. And oh, my goodness, if we restrict our exports of one particular product, our partners might restrict their exports of a different product to us. And so, it’s this case of saying, let’s, let’s all see how this is working out and let’s not go there. That worked really well. Somebody else would have I don’t feel like I ever said, or office ever said anything other than what was fairly obvious, if you had a minute to think about it. Um, but most people don’t have a minute to think about it, so it’s useful to be there and make sure we’re thinking about things maybe a little bit sooner than later. Um, so I guess that’s something that I found really valuable was, you know, the ability to bring information to the table quickly and foresight to the table quickly so that you can head off problems just a little bit earlier. Um, it’s, uh. It’s gratifying.

Kirk: Yeah, I’m sure it was. Um. So as a professor at tuck, it’s probably safe to say that most of your work involves research and teaching. Right. Um, and that’s very different from being the chief economist at a huge bureaucracy. Right. So, talk a little bit about what it was like to transition into that new role and kind of the skills that you felt you had to, to learn or brush up on to be successful in that job.

Emily: Yeah. Uh, so I was surprised how many of my skills did transition smoothly to the State Department and to the role of the chief economist. Um, I wasn’t doing research, but I was guiding research and thinking about what were the questions we needed to be able to answer. Um, how would we start to answer them? Who did I need to hire? What kind of computer systems? What kind of software? What kind of data would our office need to be able to answer questions that I thought we were probably going to need to answer a few weeks, a few months, maybe even a few years from now. So, in that sense, it was very similar to research. Um, what’s different and critically different in that way from research is you don’t get to pick your problems. The problems are going to come to you. And so, in research, we, we, we tend to let the perfect be the enemy of the good in the sense that you work on projects and answer questions that you have a pretty good, good hunch you’ll be able to answer and answer very well. In reality, there are questions that you need to come up with the best possible answer for. Um but your empirical identification strategy will not be perfect.

Your data will be incredibly incomplete. Your answer will be messy. And by the way, you have to come up with an answer in 12 or 18 hours. So being able to do research, that’s as good as possible in a short timeline, that’s something I needed to be able to learn to do. I had to appreciate, uh, messy question asking and answering. Um, so that’s big thing number one. Teaching. Also, really useful teaching is nothing more than synthesizing complicated ideas and then sharing them with other people and convincing them that maybe they should care. And that’s exactly what you do in a policy environment, too. You’re absorbing lots of different information Nation in lots of different ways from lots of different people parties, agencies, sources. You’re trying to synthesize it very quickly. At the end of the day, what will shape my decision or our decision? We need to choose. Do we go left, or do we go right at this intersection? Again, it’s boiling it down to first principles and then articulating what is it that we need to come up with? Deliberate answer here in the moment to make a decision that feels an awful lot like being in a classroom to me.

Kirk: So this this kind of leads me to my next question. Um, you went through effectively a two-year intense boot camp, if you will, you know, how is Emily Blanchard different today than she was before that whole boot camp started?

Emily: Emily Blanchard has a lot more gray hair, so I, um, I’m very different now than I was then. Um, in some ways. So, I’ve learned a lot, and I intend to take all of those pieces of what I learned how to be a manager, how to work under time pressure, how to frankly just manage some of the stress of the job. There are so many things that are far more important, and I’ll be honest, sometimes far more scary, far, far more frightening, um, that you learn in government, and you have to as a, as a survival mechanism, learn to set some of those pieces aside and continue to operate with, if anything, even more calm, um, even more equanimity. So, I learned to do that. I developed a bunch of coping skills and management techniques that I’ll keep Um. I also learned how much academic economics can do that we are not doing. Um, and it is because of this perfect being the enemy of the good theme that I mentioned earlier. Academic economists will publish papers where we can demonstrate and develop new methodological techniques, new theory. We build very beautiful machines for tackling questions that are that are, uh, at least plausibly answerable. But there are a bunch of questions, especially around economic security, that are very, very difficult to answer. They’re very messy problems to deal with. And I’ve come out with an almost evangelical zeal that we need to work on them anyway. And that’s what I plan to do. I’m going to get deeper in the trenches and work on some really hard things. I think it is my responsibility as an academic, as somebody with the immense privilege of time and opportunity and frankly, resources to think, to think about things that matter first order and things where nobody else is doing work. So that’s one thing that’s very different about me. I’m almost a little bit of a zealot.

Speaker 4: This is a very significant defeat for Mr. Trump, a historic accomplishment for the Democrats, even though some House races remain undecided. CNN can now project that Democrats will win the majority in the U.S. House of Representatives. Jake, this is a huge win for the Democrats, a huge setback for the president and for the Republicans.

Kirk: I want to shift gears a little bit and talk about one of your more recent papers. It’s called did Trump’s trade war impact the 2018 election, which is forthcoming in the Journal of International Economics. As people may remember, the 2018 midterm elections while Trump was president resulted in a blue wave in which Republicans lost a total of 40 House seats. In this paper, you and your co-authors correlate that election outcome with the fallout from the trade war. Trump started with major US trading partners in early 2018. Remind us of the main points of that trade war, and how it might have impacted the 2018 election, and how you think it’s still causing ripple effects today.

Emily: Yeah. Great question. So, the 2018 trade war, in the spring and summer of 2018, the Trump administration began to roll out a series of tariff actions designed to. Well, and that did increase tariffs, taxes on US imports of certain products. Some of these tariffs were applied against all of our trading partners for certain goods. So, for example, two at the top of the list were steel and aluminum. Subsequently, there have been a bunch of deals that have been negotiated with various trade partners to relax those constraints. But those metals tariffs remain in place today against many, many partners at the same time, and maybe even more importantly, in the summer of 2018, the US government, the Trump administration, imposed a series of tariffs, starting with new tariffs on about $50 billion worth of US imports of products from China, um, under something called section 301 of the Trade Act of 1974.

Speaker 5: But we have one particular problem, and I view them as a friend. I have tremendous respect for President XI. So, we have a lot of things happening, but in particular with China, we’re going to be doing a section 301 trade action. It could be about $60 billion, but that’s really just a fraction of what we’re talking about. I’ve been speaking with the highest Chinese representatives, including the president, and I’ve asked them to reduce the trade deficit immediately by $100 billion. It’s a.

Emily: Lot. Basically, there was a government investigation into us, sorry, Chinese acts, policies and practices, uh, designed to promote certain industries and actually foreign technology transfer taking technology and, and intellectual property and trade secrets from U.S. firms, sort of forced technology transfer from US firms operating in China. And the US said, hey, you really shouldn’t do that This is in violation of trade commitments and our trade rules. So, we’re going to impose these tariff penalties until you change your behavior. Um, so the US imposed those new tariffs. China hit back with tariffs on $50 billion worth of US exports to China. The Trump administration came back. This went back and forth with an escalation tit for tat over the course of 2018. And by the end of the year, and in fact, before the 2018 congressional election, there were new tariffs on virtually all US imports from China and new tariffs on virtually all Chinese imports from the United States. Um, these were new tariff protections for certain products for certain sectors, certain firms in the US that face less competition from China as a result of these, these taxes. Um, but it also went the other way. And it actually turns out that cutting the other way, lots of U.S. exporters had enormous exports to China that now faced much higher tariffs. The Beijing interestingly raised tariffs against especially U.S. farmers and at the same time lowered their tariffs against farmers from other countries. So, for example, they cut their tariffs on soybeans from around the world, including major U.S. competitors like Brazil and raise the tariffs on soybeans from the United States. So, the U.S. tariffs and the Chinese tariffs created a bunch of winners and losers in the US economy. In fact, among the losers. The losers in the US economy. This is subtle and a little wonky, but really important distinction. It turns out that so many of the parts and components that go in US manufactured products and US manufacturing companies, firms in the United States, those inputs come from China as well. So, companies and factories that were importing parts from China saw their input costs rise, their competitors making products in other countries in the world and Canada and Europe did not have that increase in their input prices. So those firms were disadvantaged as well. So, what we do in the paper is we look at the geography of the costs and the benefits of the 2018 trade war for U.S. firms around the geography of the US economy. In fact, we look at the county level. So very specific data, looking at the economic activity, what do what companies are making, what selling what and where are they selling it and what are they buying and from where in the US economy. And what we find interestingly, we actually thought we might find that there was public support for these, these tariffs and that the counties that we sort of thought some counties will benefit and rhetorically, you know, removing or reducing imports from China, maybe we would see that that voters, in a sense, rewarded the incumbent Republican Party that made these decisions for doing that.

But that’s not what we saw in the data at all. In fact, we saw that Republicans lost House seats. Um, our estimates suggest that Republican candidates for the House of Representatives lost seats, lost elections as a result of these tariffs because the costs outweighed the benefits for US firms, US workers. Um, so that was a surprise. A couple of implications. So, implication number one is voters do seem to care about trade policy. This actually matters because there is a supposition by many that voters don’t really care about pay attention to trade policy. And so maybe the government can do whatever it wants and voters won’t be paying attention. Well, that doesn’t seem to be the case. But then the other thing that’s really important to see is trade policy. When tariffs go up, not everybody is in support of that. And in fact, when you start to look at the consequences, which firms which workers are made better off or worse off from tariffs, it’s a really mixed picture. So, the inference that we might be tempted to make that, of course, voters everywhere always prefer higher tariffs is probably not correct. So, this is really a political economy takeaway that we find quite important.

Kirk: Yeah. I think it’s really interesting to for you to have teased out the, the, the effects of that those trade policies on, on people’s well-being and sort of their pocketbooks. Right. Like on the ground in America. And even if ideologically, they might have agreed with the policy. When you have less money in your bank account, I think that hurts a lot more. And it makes you change how you vote, right? Is that sort of what you’re what you’re postulating that is.

Emily: That’s exactly. Well, that’s what we’re asking. And that’s what we seem. That’s what we see in the data. Um, and again, bank accounts matter. And the critical piece here is bank accounts matter. Uh, bank accounts depend on trade policy, not just with tariffs as a tax on foreign competition. So, it’s only good for us. Tariffs also matter. Their attacks on our consumption, their attacks on the companies that we work for who buy imported inputs and products, parts and components. So, it can hurt our wages as well, maybe even, uh, reduce employment in these sectors. There’s other research that shows that there have been negative employment effects of the 2018 tariffs on U.S. manufacturing sector. And then critically, and maybe to me, especially having served in diplomacy and thinking about the international relations piece of things, um, when a country, any country and especially the United States, when we impose tariffs, our partners impose tariffs of their own. And those tariffs have consequences for US countries that import also export. That’s also true for firms. Firms that export typically also import. So, thinking about something as sort of an easy one-way policy, it just is not. So, we know that in theory, but now we see it borne out not only in the economic effects but in the voting choices of, of U.S. citizens. So that’s that, I think is quite an important finding.

Speaker 6: The Biden administration is rolling out heavy tariffs on many products entering the U.S. from China, with the goal of punishing Chinese companies, encouraging more production here at home, and also, by the way, to attract voters in this presidential election. Ed O’Keefe is at the I believe.

Kirk: President Biden has continued a lot of the tariffs from 2018. Right. Um, so it’s probably safe to say that there’s much less free trade today than there was ten years ago. Um, and I’m curious if you think that this has been sort of an experiment that we’re finding the answers to, and now we’re going we’re going to kind of correct course and go back to more free trade. Or do you think that this is going to continue this, this sort of, um, erosion of free trade is going to continue? How do you feel about that?

Emily: Yeah, great. Great question. Well, I’ve got a couple of reactions to this. So, number one, you’re correct. The Biden administration, for the most part has upheld the tariffs that were imposed, the increased tariffs that were imposed in 2018. That said, there are a couple of very important distinctions. One is simply those multilaterally imposed tariffs, like the section 232 tariffs. Shortly after coming into office, Biden relaxed those tariffs against many of our key partners, not least Europe. The EU dropped those section 232 tariffs. That was a critical move. Um, those two, those tariffs were designed to protect national security. It’s very hard to argue that importing steel and aluminum from Europe is compromising U.S. national security. So there have been important changes in that front. The bilateral tariffs against China are a different matter. And in fact, the Biden administration has been deeply, deeply involved in a statutorily required but also, in my opinion, quite welcome review of those tariffs that were imposed in 2018. That’s the way the law works under section 301 of the trade rules. After four years, you take a careful look at the structure of those tariffs, asking if ask if they’re having their desired effect, their intended effect, and if not revisiting them, maybe reducing some, maybe even increasing others depending on what you see in the data. That process is ongoing. It is a very complex process. It’s driven by data. I won’t say more about the details, except that we are learning based on data.

So the interagency is deeply, deeply involved in making sure it understands how these tariffs actually work in practice and how to make them better, how to recalibrate those tariffs to make them better serve the American interest. So that’s definitely happening. Now if you’re comfortable with my going on, I’ll answer the bigger geopolitical question? Yes, please. Yeah. So are we headed was 2018 to 2024. They would say the rise in was the rise in protectionism that we’ve seen since 2018. Is that a temporary blip. Uh, I regret to say I think the answer is no. Not at all. That said and let me be clear why all sorts of reasons, but principally geopolitics. And here’s the other uncomfortable piece climate change. So, we haven’t talked about in this podcast. And I won’t get super wonky here. We haven’t talked about changes in other countries trade policies, but one of the critical international economic policy changes to take place over the last golly, decades, frankly. But just in the last year The EU’s. The European Union’s Carbon Border Adjustment Mechanism [CBAM] has been voted on and approved by European nations, and so the CBAM is in place. The tariffs don’t actually take place yet, but the CBAM is designed to impose tariffs on imports of certain goods. It starts fairly narrow with just six big buckets of products that are affected.

Um impose tariffs on imports into Europe of carbon intensive products, regardless of where those products are made in the world. Um, and that’s really important for a very, very long time. Uh, trade rules have said you can’t discriminate. Uh, imposing tariffs, you can’t impose tariffs on products based on how products were made. Right. And in fact, if you have an if two countries are members of the World Trade Organization and there’s an MFN treatment most favored nation treatment, you have to treat all of your imports the same way, regardless of where and again, how they were produced across your MFN partners. But the EU CBAM says, no, we’re going to look at the products and say, this ton of steel was produced with a really carbon intensive, maybe blast furnace, uh, production method, maybe fired by coal plants. And then this unit of steel over here was produced using much more efficient, much less carbon intensive electric arc furnace, maybe even powered by renewables and then charge differential tax rates. Now that’s a huge change. It’s very much, and I would argue it’s necessary, uh, to support EU decarbonization efforts domestically because in Europe they have carbon taxes. And so, if they impose carbon taxes on the production of carbon intensive goods in Europe, but they can import products made with carbon intensive products and there’s no offsetting tax adjustment. Then obviously, you would imagine European factories making those products would shut down.

And you just in a sense import the dirty products from overseas. So, in decarbonization, something like a carbon border adjustment mechanism, if you’re using carbon taxes, is a necessary leg of sort of a three-legged stool of policy intervention. But fundamentally, you’re imposing new trade restrictions with the objective of decarbonizing the environment and addressing climate change. This is a huge change. So that by itself is the using of trade policy to start to try to shape decarbonization activities not only within a country’s borders, but also outside of it. That’s a huge change. I don’t think that’s going anywhere, and I think we’re going to see more of that from around the world. At the same time, geopolitics, countries increasingly it’s uncomfortable. But it’s true. Countries increasingly care where products are made, where services are imported from, where technologies flow. There have been fundamental changes in the US position towards the exports, even of critical technologies. The new restrictions on US exports that were announced October 7th of 2022 by NSA National Security Adviser Jake Sullivan. Huge change in in US approach to managing international economic exchange with the goal of managing responsibly, managing competition across countries and national security. Until we see autocracies decide not to use or misuse global market power for their own geopolitical ends. I think we’re going to see more trade protection, not less.

Kirk: So as we wrap up. I’d love to hear a little bit about your sort of new research plans and the issues in the global economy that you’re, that are on your radar, that you’re, that you’re tracking or that you find interesting.

Emily: Oh, boy. So, lots of exciting stuff. There’s so much going on in the world today that I will think about that I have been thinking about, and that I want to bring some more academic rigor to as I as I cogitate and think about the ways forward. The big bucket for so much of what I’m thinking about is economic and national security. Um, this can veer into the philosophical, which is how do you define economic security? Is it just the economic aspects of traditionally defined Define national security. Something about defense or maintaining access to essential goods, services, ideas, technologies. Um, or is does economic security start to include things like well-being or broader economic inclusion? Because one thing I observed in Washington and around the world, as I traveled to virtually every continent, I did not get to Antarctica, but I but I heard governments and businesses, business leaders talking about this need and this desire to build a more sustainable, more inclusive, more secure global economy. Great. What does that really mean and look like? What falls into that bucket and then critically, what doesn’t? Right. So that’s the big topic and question that I’m thinking about. And then narrowing down in there. There are a couple of really interesting pieces that were sort of where I’ll start. One of the big ones is empirical. We do not have a very good map of the way the global economy is stitched together.

You might imagine we have phenomenal trade data. Many countries have excellent data that, uh, maps workers over the course of their, their lifetimes and matches them to firms. And then you can look at how those firms trade and develop new technologies. And that’s incredible. You get great insights for the countries that report that sort of data. But for much of the world, that information, those data are collected, and they probably aren’t going to be in the near term. Um, and in fact, production data isn’t even well mapped and measured. If you asked me tomorrow to come up with a definitive answer on how much germanium could be produced next year around the world at all the facilities. I couldn’t tell you. And then how that germanium would make it to market through in the form of different products traded by different firms around the world. I wouldn’t have that information either, because they don’t exist. But there are some very exciting new technologies where firms are using machine learning, where they’re taking very different forms of data and information, collecting it and trying it to knit together to understand this global map of the world so that we can understand what global production networks really look like, to identify critical bottlenecks or choke points that create economic vulnerabilities and national security vulnerabilities that are unacceptable risk.

So that’s one area of work. This is like super wonky Wonkery methodological, but I’ve seen the use cases for it. I see the need for it from the government side. It’s really hard. It’s going to be very messy. Um, but I want to work on that. And I think there are some ways to do that. So that’s one piece. Um, here’s another example. Um, and this gets to my work that I’ve done for years on the role and, and, and structure of agreements between governments. So economic security and the rules based economic order, the World Trade Organization rules seem to be at loggerheads. And they certainly have been, uh, recently, as for example, the US Trade representative has rejected a recent WTO ruling that found against the US national security tariffs. Section 232 tariffs on steel and aluminum said the US was coloring outside the lines, essentially of our multilateral commitments. And the US has sort of countered and said, well, no, this is fundamentally, if we say national security, this suddenly we’re outside the realm of international rules. Is there a way to and this becomes an economic mechanism design problem? Is there a way to split the difference, to come up with maybe some modest changes to the way international rules are structured and international rules on global commerce or structured, so that we can define what’s inbounds and what’s out of bounds.

When are countries acting in a way that is, um, potentially subject to protectionist capture and to vested special interests of some have accused the US of being in this case, not my position, but some have. Um, or is there a way that we can say, okay you can do X but not Y. You can come up to this line in this circumstance, but not beyond. I think there are ways we can get it better, and I have some very wonky ideas about how to do that, but I will not do that. That’s very much law and econ oriented, but at the end of the day, why do we care? Because we want global commerce to continue to be open and free despite rising geopolitical tension and competition, strategic competition between large countries, because we want to make sure that trade can continue to be open and free and inclusive, where countries around the world can continue to produce and sell to each other, even if, for example, they have more or less carbon intensive production techniques. We have to find ways not to be purists or puritanical in our trade rules, but to allow for some nuance. So, I want to work on those issues again. I it’s just so exciting and I think I think it matters and we’re not doing enough work on it today.

Kirk: Emily Blanchard, thank you very much for your time. It’s been a pleasure to speak with you and good luck with your research and teaching.

Emily: Thanks so much, Kirk. It’s been a pleasure.

Kirk: I’d like to thank my guest, Emily Blanchard. You’ve been listening to Knowledge and Practice, a podcast from the Tuck School of Business at Dartmouth. Please like and subscribe to the show. And if you enjoyed it, then please write a review as it helps people find the show. This show was recorded by me, Kirk Kardashian. It was produced and sound designed by Tom Walley. See you next time.