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Economic consequences of a hypothetical suspension of Russia-EU trade

Author

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  • Javier Quintana

Abstract

A hypothetical interruption of energy commodity imports from Russia could significantly affect the Spanish economy. The difficulty of replacing these products in the short term would reduce the energy supply and compound the current inflationary episode, both of which would weigh on economic activity. However, since Spain is less energy dependent on Russia than other European economies, the effects on the Spanish economy would be notably smaller. Lastly, the impact would be amplified due to the shock propagating through global production chains, with a particularly marked effect on certain sectors of activity. The interruption of exports or imports of other goods would also adversely affect the European economies, although it would have a more limited impact than in the case of energy commodities.

Suggested Citation

  • Javier Quintana, 2022. "Economic consequences of a hypothetical suspension of Russia-EU trade," Economic Bulletin, Banco de España, issue 2/2022.
  • Handle: RePEc:bde:journl:y:2022:i:02:d:aa:n:12
    Note: Analytical Articles
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    File URL: https://www.bde.es/f/webbde/SES/Secciones/Publicaciones/InformesBoletinesRevistas/ArticulosAnaliticos/22/T2/Files/be2202-art12e.pdf
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    References listed on IDEAS

    as
    1. Rüdiger Bachmann & David Baqaee & Christian Bayer & Moritz Kuhn & Andreas Löschel & Benjamin Moll & Andreas Peichl & Karen Pittel & Moritz Schularick, 2022. "What if? The economic effects for Germany of a stop of energy imports from Russia," Working Papers hal-03881469, HAL.
    2. Lorenzo Caliendo & Fernando Parro, 2015. "Estimates of the Trade and Welfare Effects of NAFTA," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(1), pages 1-44.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Ciccarelli, Matteo & Darracq Pariès, Matthieu & Priftis, Romanos & Angelini, Elena & Bańbura, Marta & Bokan, Nikola & Fagan, Gabriel & Gumiel, José Emilio & Kornprobst, Antoine & Lalik, Magdalena & Mo, 2024. "ECB macroeconometric models for forecasting and policy analysis," Occasional Paper Series 344, European Central Bank.
    2. Fernández-Cerezo, Alejandro & Moral-Benito, Enrique & Quintana, Javier, 2024. "On the macroeconomic impact of NGEU funds and its propagation through the production network," Economic Modelling, Elsevier, vol. 132(C).

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    More about this item

    Keywords

    trade sanctions; energy; production chains.;
    All these keywords.

    JEL classification:

    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • N70 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - General, International, or Comparative
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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