As part of a larger conversation in the latest episode of GZERO World, Harvard economist and former IMF Deputy Managing Director Gita Gopinath breaks down the economic impact of the Iran war—and why the US is relatively insulated.

So far, she says, the shock is modest compared to past crises. Global growth is expected to drop by about 0.3 percentage points—a fraction of the damage seen during the pandemic.

But the impact isn’t evenly felt. While rising energy prices are pushing inflation higher worldwide, the US economy is less exposed than most. Gopinath estimates the hit to US growth at just 0.1 to 0.15 percentage points, thanks in part to domestic energy production.

That doesn’t mean Americans are immune. Higher prices are still adding hundreds of dollars in costs for households. But compared to more energy-dependent economies, the US is better positioned. The takeaway: the Iran war is a global economic shock—but not a balanced one.