The Political Economy of Geoeconomic Power

AEA Papers and Proceedings · 2025-05-01 · 5 citations

Great powers are increasingly using their economic and financial strength for geopolitical aims. This rise of “geoeconomics” has the potential to reshape the international trade and financial system. This paper examines the role of domestic political economy forces in determining a government's ability to project geoeconomic power abroad. We also discuss the role that persuading or coercing foreign governments plays in projecting geoeconomic power around the world.

Internationalizing Like China

American Economic Review · 2025-02-28 · 21 citations

We empirically characterize how China is internationalizing its bond market by staggering the entry of different types of foreign investors into its domestic market and propose a dynamic reputation model to explain this strategy. Our framework rationalizes China’s strategy as trying to build credibility as a safe issuer while reducing the cost of capital flight. We use our framework to shed light on China’s response to episodes of capital outflows. (JEL E44, F38, G12, G15, G23, O16, P34)

Putting Economics Back Into Geoeconomics

SSRN Electronic Journal · 2025-01-01 · 2 citations

International Currency Competition

SSRN Electronic Journal · 2025-01-01 · 3 citations

Putting Economics Back into Geoeconomics

2025-04-04 · 1 citations

Geoeconomics is the use of a country's economic strength to exert influence on foreign entities to achieve geopolitical or economic goals. We discuss how concepts of power in the political science and economics literature can be used to guide research on geoeconomics. Economic threats as a form of coercion have seen a recent resurgence. We show how different types of threats can be modeled using simple tools and discuss what channels their potential effectiveness is based on. We discuss important open questions for the future literature to pursue.

GCAP Public Security-Level Data on U.S. Fund Holdings

2025-11-12

We construct representative security-fund-level longitudinal data for the United States using regulatory filings of portfolio holdings from Form N-PORT. We validate our dataset by comparing coverage and composition to official statistics from the Federal Reserve's Financial Accounts of the United States (formerly known as the Flow of Funds) and Treasury International Capital (TIC) System, and to micro-level commercial datasets such as Morningstar. We showcase an application by replicating and updating Maggiori, Neiman and Schreger (2020) findings on home currency bias using N-PORT instead of commercial fund holdings data. Our results confirm that N-PORT data offer a comprehensive, reliable, and public alternative to commercial datasets for research in macroeconomics and finance. We make all the security-level data on holdings available in a public repository of the GCAP Lab and provide code for updating the data.

GCAP Public Security-Level Data on U.S. Fund Holdings

SSRN Electronic Journal · 2025-01-01

GCAP Public Security-Level Data on U.S. Fund Holdings

National Bureau of Economic Research · 2025-11-01 · 2 citations

We construct representative security-fund-level longitudinal data for the United States using regulatory filings of portfolio holdings from Form N-PORT.We validate our dataset by comparing coverage and composition to official statistics from the Federal Reserve's Financial Accounts of the United States (formerly known as the Flow of Funds) and Treasury International Capital (TIC) System, and to micro-level commercial datasets.We showcase an application by replicating and updating Maggiori, Neiman and Schreger (2020) findings on home currency bias using N-PORT instead of commercial fund holdings data.Our results confirm that N-PORT data offer a comprehensive, reliable, and public source for research in macroeconomics and finance.We make all the security-level data on holdings available in a public repository of the GCAP Lab and provide code for updating the data.

Decoupling Dollar and Treasury Privilege

International Finance Discussion Paper · 2025-12-12

We document a strong decoupling between the convenience yield on the US Dollar and US Treasuries. We measure the convenience of the U.S. dollar using covered interest parity (CIP) deviations between risk-free bank rates, such as secured overnight rates since the benchmark reform. In parallel, we measure the convenience of U.S. Treasury bonds through CIP deviations between government bond yields. We find a pronounced divergence between the two convenience measures in recent years: while the U.S. dollar exhibits strong convenience post-Global Financial Crisis, the U.S. Treasury convenience has not only declined substantially but has turned negative, most strongly so at medium- to long-term maturities. We argue that the relative supply of government bonds between the US and other developed markets is a key driver of the U.S. Treasury convenience compared to other government bonds. Finally, we present a simple framework with a constrained global financial intermediary to link dollar and Treasury convenience.

Putting Economics Back Into Geoeconomics

NBER Macroeconomics Annual · 2025-04-01 · 10 citations

Geoeconomics is the use of a country's economic strength to exert influence on foreign entities to achieve geopolitical or economic goals.We discuss how concepts of power in the political science and economics literature can be used to guide research on geoeconomics.Economic threats as a form of coercion have seen a recent resurgence.We show how different types of threats can be modeled using simple tools and discuss what channels their potential effectiveness is based on.We discuss important open questions for the future literature to pursue.