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Quantifying the effects of sanctions on trade and economic growth

The conflict between Russia and Ukraine dominates international news. In the event of an intensified military conflict, the imposition of sanctions is likely. But what effects on the economy, particularly on trade, can be expected?

Berlin Economics already examined the economic effects of mutual EU-Russia sanctions on bilateral trade and economic growth in 2017. The estimates of other studies were also subjected to a plausibility test.

The estimate prepared by BE basically came to the conclusion that the imposition of sanctions also had a price for the sanctioning party, which is reflected in declining trade and weaker economic growth. Within the EU, it could be shown that the degree of economic impact is related to the spatial proximity or distance to Russia, i.e. the smaller the distance of an EU member state to Russia, the greater the impact on GDP development. For trade, this result could be confirmed, at least in relative terms: The Baltic states each had the largest impact.

Please find the full presentation here.

Please follow this link to access the interview with BE-Mananging Director Dr. Ricardo Giucci on the effects of sanctions in Handelsblatt (in German).