Trade decoupling from Russia

Alessandro Borin, Francesco Conteduca, Enrica Di Stefano, Vanessa Gunnella, Michele Mancini and Ludovic Panon

International Economics, 2023, vol. 175, issue C, 25-44

Abstract: We use a general equilibrium trade model to quantify the welfare cost of decoupling from Russia. We find that a doubling of non-tariff barriers imposed by the West on Russian imports and exports of all goods would decrease Russian welfare by 4.8% and would have a relatively small effect on Western welfare. We show that the welfare cost of decoupling is amplified by supply chains and that restrictions on Russian energy, especially oil, matter quantitatively. Finally, we find that welfare losses generated by restrictions actually applied by the West in the aftermath of the 2022 Russian invasion of Ukraine account for around 80% of those obtained in our decoupling scenario.

Keywords: Decoupling; Trade restrictions; Energy; International trade; Global value chains (search for similar items in EconPapers)
JEL-codes: F02 F11 F15 F17 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:175:y:2023:i:c:p:25-44

DOI: 10.1016/j.inteco.2023.05.001

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