Maurice Obstfeld

Trump has clearly been flexing his military muscles on the global stage and seems somewhat intoxicated with that.

So it wouldn't surprise me to see some sort of military strike

You know, the question is, does a one-time action as opposed to some sort of sustained military pressure actually have a big effect on the situation there?

Sustained military pressure, I think, would raise questions by Trump's MAGA base in the U.S.

about what is he doing?

Well, it could affect oil prices.

Oil prices have already factored that in to some extent.

I don't see...

big regional geopolitical spillovers.

Russia, China are not going to come to Iran's defense in this situation.

They'll make noises about it.

So I think it would probably end up being a fairly contained event.

But the question is, would it actually make things better in a sustained way

bring down the regime, and if the regime is brought down, then what's the plan for the day after?

I don't think there's a plan for the day after.

Middle East is already a fragile place, and there are unintended consequences from further dropping matches onto the Tinder.

Even if you didn't read the 830 pages, it had a lovely purple lavender cover.

And you could walk around campus toting your Absfeld and Rogoff, and you'd get cool points just for that.

Joining us now, one of the foundation academics we have on our International Macroeconomics Program,

Maurice Obstfeld, he's with the Peterson Institute, with Posen and Blanchard.