Macroeconomic Consequences of the War in Ukraine on Central and Eastern European Economies: A SVAR Analysis

Daniel Daianu (), Tudor Grosu (), Andrei Neacsu (), Andrei Tanase () and Radu Vranceanu
Additional contact information
Daniel Daianu: Romanian Fiscal Council
Tudor Grosu: National Bank of Romania
Andrei Neacsu: A.S.E. - The Bucharest University of Economic Studies / Academia de Studii Economice din Bucureşti
Andrei Tanase: National Bank of Romania

Working Papers from HAL

Abstract: This paper investigates the macroeconomic effects from the Russian invasion of Ukraine in February 2022 on the economies of Bulgaria, Czechia, Hungary, Poland and Romania, using a SVAR model based on a similar analytical framework as that described in Bruhin et al. (2023)[3]. The exogenous shock is captured by the geopolitical risk index developed by Caldara and Iacoviello (2022) [4]. Simulations show that, by the end of 2022, the war contributed to a rise in inflation by 0.45-0.85 percentage points and a drop in GDP by 0.79-1.55 percentage points compared to the counterfactual "no-war" scenario. Our findings suggest a generally larger impact on economic activity in CEE countries compared to Western European economies, a result that can be attributed to the structural weaknesses of these economies, and to the geographic proximity to the conflict area, which led to a higher volatility of the series in the CEE region. Regarding inflation, the uncertainty bands suggest that the war's impact could have been larger, potentially reaching up to 3 percentage points.

Keywords: Ukraine war; Central and Eastern Europe; Structural vector autoregression (search for similar items in EconPapers)
Date: 2024-12-17
Note: View the original document on HAL open archive server: https://essec.hal.science/hal-04842739v1
References: Add references at CitEc
Citations:

Downloads: (external link)
https://essec.hal.science/hal-04842739v1/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-04842739

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().