What the literature says about the effects of sanctions on Russia

This policy brief frames the discussion of sanctions imposed on Russia since the invasion of Ukraine in a wider international and historical perspective. We present a brief review of recent literature related to the macroeconomic effects of sanctions in Russia and other countries. Our analysis suggests that the general economic effects of the war and sanctions on Russia are neither unprecedented nor insignificant in comparison to previous sanction episodes. The literature also suggests that while the overall economic effects of sanctions on Russia have been diluted by various factors, they have strongly affected the parts of the Russian economy they target.

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Abstract. ...3
1. Introduction ....4
2. Brief background on sanctions research ....4
2.1 General features of sanctions ....4
2.2 Sanctions databases ....5
3. Efficacy of sanctions ....5
3.1 Economic effects of sanctions ....5
3.1.1 Effect of sanctions on GDP ....6
3.1.2 Effect of sanctions on trade flows ....6
3.1.3 Effect of sanctions on FDI ....7
3.2 Do sanctions achieve their policy goals? .... 7
4. Effects of sanctions on Russia ....9
4.1 Sanctions imposed on Russia in 2014 ....10
4.1.1 Effects on Russia’s GDP....10
4.1.2 Effects on Russia’s trade flows ....10
4.1.3 Effects on other economic variables ....11
4.2 Sanctions imposed on Russia in 2022 ....11
4.2.1 Ex-ante simulations on the effects of sanctions ....12
4.2.2 Analysis of outcomes ....13
5. Concluding remarks ....14
References ....16