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Impairing Globalization: The Russo-Ukrainian War, Western Economic Sanctions and Asset Seizures

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  • Steven Rosefielde

    (Department of Economics, University of North Carolina and Chapel Hill, Chapel Hill, NC 27599, USA)

Abstract

The potency of economic sanctions imposed on nations depends on demand and supply adjustment possibilities. Adverse GDP impacts will be maximal when import, export, production, distribution and finance are inflexible (universal non-substitution). This paper elaborates on these conditions and quantifies the maximum GDP loss that Western sanctions could have inflicted on Russia in 2022–2023. It reports the World Bank’s predictions, contrasts them with the results and draws inferences about the efficiency of Russia’s workably competitive markets. This paper shows that Russia’s economic system exhibits moderate universal substitutability and is less vulnerable to punitive discipline than Western policymakers suppose. The likelihood that economic sanctions will compel the Kremlin to restore Ukraine’s territorial integrity ceteris paribus is correspondingly low, even though war reduces Russia’s quality of existence. Western economic sanctions serve narrow geostrategic ends that are reconcilable with Pareto-efficient free trade and globalization, if precision-targeted, but as the Russo-Ukrainian war intensifies, an expanded array of novel and dubiously legal sanctions is degrading free trade, and spurring de-globalization and anti-Western coalitions. If this armed combat is prolonged, the goals of free trade and globalization could be set back for decades.

Suggested Citation

  • Steven Rosefielde, 2024. "Impairing Globalization: The Russo-Ukrainian War, Western Economic Sanctions and Asset Seizures," JRFM, MDPI, vol. 17(9), pages 1-11, September.
  • Handle: RePEc:gam:jjrfmx:v:17:y:2024:i:9:p:402-:d:1473922
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    References listed on IDEAS

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    1. Marco Cipriani & Linda S. Goldberg & Gabriele La Spada, 2023. "Financial Sanctions, SWIFT, and the Architecture of the International Payment System," Journal of Economic Perspectives, American Economic Association, vol. 37(1), pages 31-52, Winter.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. Rosefielde, Steven & Pfouts, Ralph W., 1988. "Economic optimization and technical efficiency in Soviet enterprises jointly regulated by plans and incentives," European Economic Review, Elsevier, vol. 32(6), pages 1285-1299, July.
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