The cost of war: Impact of sanctions on Russia following the invasion of Ukraine

We use a computable general equilibrium model of world trade to quantify the possible impact of economic sanctions imposed by Western and other countries in response to Russia’s invasion of Ukraine. If sender countries chose 100 % import tariffs and export taxes on trade with Russia, Russia’s GDP wo...

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Bibliographic Details
Published in:Journal of policy modeling 2023-03, Vol.45 (2), p.305-319
Main Author: Hosoe, Nobuhiro
Format: Article
Language:English
Subjects:
Economic sanctions
Energy security
Food security
Russian invasion
Simulation
Ukraine
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Summary:We use a computable general equilibrium model of world trade to quantify the possible impact of economic sanctions imposed by Western and other countries in response to Russia’s invasion of Ukraine. If sender countries chose 100 % import tariffs and export taxes on trade with Russia, Russia’s GDP would decline by 3–7 % due to the resulting significant reduction in exports. By contrast, the GDP loss for those countries would be 0.2 % for the European economies, but only about 0.05 % for Japan. Although unlikely, the effect of China’s participation in the sanctions would be more significant than that of India. There are concerns about food and energy crises due to economic sanctions against Russia, but the effect on food supplies would not be a serious problem for either senders or third parties. The impact on energy supplies would affect all senders to some extent; for example, there would be a 3% reduction of energy consumption and a 3–4 % rise in electricity and town gas prices in Japan.
ISSN:0161-8938
1873-8060
DOI:10.1016/j.jpolmod.2023.04.001