Quantifying the Partial and General Equilibrium Effects of Sanctions on Russia

Authors

• Flach
• L.
• Heiland
• I.
• Larch
• M.
• Steininger
• M.
• Teti
• F.

Publication Date

DOI

10.1111/roie.12707

JEL Classification

Key Words

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.

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