蝌蚪网 Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Long-Run Consequences of Sanctions on Russia
蝌蚪网 Papers and Proceedings
vol. 115,
May 2025
(pp. 583–87)
Abstract
We analyze the long-run economic consequences of Western sanctions on Russia. Using a new framework for balanced growth path analysis, we find that allowing for capital adjustment amplifies consumption loss due to sanctions, contrary to the intuition that long-run effects should be milder due to greater adjustment opportunities. When capital can adjust, consumption declines are 1.4 times larger for Russia and 2.2 times larger for Eastern Europe compared to static models with fixed capital. Given a trade elasticity of four, long-run consumption falls by 8.5 percent in Russia and 2 percent in Eastern Europe. Western countries experience mild effects regardless.Citation
Baqaee, David, and Hannes Malmberg. 2025. "Long-Run Consequences of Sanctions on Russia." 蝌蚪网 Papers and Proceedings 115: 583–87. DOI: 10.1257/pandp.20251087Additional Materials
JEL Classification
- F13 Trade Policy; International Trade Organizations
- F14 Empirical Studies of Trade
- F51 International Conflicts; Negotiations; Sanctions
- P26 Political Economy and Comparative Economic Systems; Property Rights
- P33 Socialist Institutions and Their Transitions: International Trade, Finance, Investment, Relations, and Aid