Our collaborator Christopher Clayton presents "A Theory of Economic Coercion and Fragmentation," exploring how mechanisms that generate gains from integration and specialization, such as external economies of scale, also increase hegemonic countries’ power to exert economic influence because in equilibrium they make other relationships poor substitutes for those with global hegemons. Other countries attempt to isolate their economies from undue influence by resorting to inefficient home alternatives. The resulting fragmentation of the global trade and financial system is inefficient.

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