Alumni Discussion Club Event with Andris Strazds: Will (geo)politics eat (macro)economics for lunch?

Just two years ago economists were looking at epidemiologists for clues as to how the situation with the global pandemic could develop and those instantly became a key input to economic forecasts.

Some of the forecasts by epidemiologists later turned out to be way off the mark, but at least they provided a timeline and some numerical anchors.

Now economists are looking for advice from military analysts and foreign affairs professionals to get ideas about how the war in Ukraine could affect the European and global economy.

This time, however, there is no "model of war" that could provide a timeline or even approximate numbers for the baseline scenario. Thus, numerical forecasts of future developments today are highly likely to be even less precise than they were during the pandemic (which is also still playing a role, to complicate the matters further).

The key trends, however, are worth examining in order to avoid being caught completely by surprise by the future.

Andris Strazds (Class of 1996) is an Adviser to the Council at Latvijas Banka and a member of the European Council of Foreign Relations.