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Quantifying the partial and general equilibrium effects of sanctions on Russia

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  • Flach, Lisandra
  • Heiland, Inga
  • Larch, Mario
  • Steininger, Marina
  • Teti, Feodora A.

Abstract

This paper evaluates the effects of sanctions on Russia between 2014 and 2019 and the resulting countersanctions. We estimate their impact on trade in a gravity framework, allowing for treatment heterogeneity among pairs and sectors, and use the estimated elasticities in a general equilibrium analysis. We find that the sanctions decreased trade with Russia in key sectors, translating to a loss in real income in Russia by 0.3%. Full decoupling of the EU and its allies from Russia would increase this effect to over 4%. Our results emphasize the role of deep sanctions as a foreign policy instrument and international cooperation.

Suggested Citation

  • Flach, Lisandra & Heiland, Inga & Larch, Mario & Steininger, Marina & Teti, Feodora A., 2023. "Quantifying the partial and general equilibrium effects of sanctions on Russia," Open Access Publications from Kiel Institute for the World Economy 302103, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkie:302103
    DOI: 10.1111/roie.12707
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    References listed on IDEAS

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    More about this item

    Keywords

    general equilibrium; sanctions; structural gravity; treatment heterogeneity;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • N4 - Economic History - - Government, War, Law, International Relations, and Regulation

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