Price caps on Russian oil and gas

A number of you have written in to ask what I think of the recent economists’ letter to Janet Yellen, proposing such price caps.  I don’t disagree with any of their economics, but I am less convinced this is a good idea.  This strikes me as a paramount example of what I call “foreign policy first.”  There is some chance that Russia initiates a nuclear attack, or takes some other set of drastic steps.  Does this price cap raise or lower that chance?  I genuinely do not know.  And thus for that reason I am agnostic about the policy.  The nuclear expected value calculations would seem to outweigh the other aspects of the proposal, and those calculations are beyond my ability to assess with much accuracy.

Often, when I have nothing to say, it is because I do not know exactly what to say.