What’s occurring in Ukraine, says the Peterson Institute’s Fred Bergsten, is an unwelcome consequence of globalization. Russian President Vladimir Putin thinks he can enjoy political and military freedom in dealing with Ukraine without experiencing crippling economic costs from sanctions or the exit of multinational firms from Russia.

Call this “Putinomics.” It presumes that Russia’s “trading and investment partners are so committed to their own economic interests that, for all the talk of tough sanctions, they will not upset the apple cart in meaningful ways,” Bergsten says. Commerce dominates geopolitical interests. This gives Putin the freedom to pursue both. In this skewed system, economic interdependence makes effective sanctions difficult and often impossible.

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