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

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  • Hosoe, Nobuhiro

Abstract

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.

Suggested Citation

  • Hosoe, Nobuhiro, 2023. "The cost of war: Impact of sanctions on Russia following the invasion of Ukraine," Journal of Policy Modeling, Elsevier, vol. 45(2), pages 305-319.
    • Handle: RePEc:eee:jpolmo:v:45:y:2023:i:2:p:305-319
    DOI: 10.1016/j.jpolmod.2023.04.001
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    Cited by:

    1. Abakah, Emmanuel Joel Aikins & Abdullah, Mohammad & Tiwari, Aviral Kumar & Wali Ullah, G M, 2024. "Asymmetric dynamics between geopolitical conflict sentiment and cryptomarkets," Research in International Business and Finance, Elsevier, vol. 69(C).
    2. Ichim Alexandru-Mihăiță, 2024. "An Empirical Analysis of the European Union's Economy and Politics in the Context of the War in Ukraine," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 18(1), pages 482-493.
    3. Aragie, Emerta A. & McDonald, Scott, 2023. "The economic consequences of price support policies in semi-subsistence economies," Journal of Policy Modeling, Elsevier, vol. 45(6), pages 1148-1166.
    4. M. Yu. Malkina, 2024. "Real Income Stress in Russian Regions Amid the Pandemic and Sanctions," Regional Research of Russia, Springer, vol. 14(2), pages 109-125, June.
    5. Ene Giorgiana-Roxana, 2024. "The Impact of Multiple Crises on the Economy. A Comparative Analysis of GFC, COVID-19 and the Ukraine War Period," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 18(1), pages 3143-3166.

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