Invasion of Ukraine and Effects on the German Economy: A CGE Approach

Gerassimos Bertsatos () and Nicholas Tsounis
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Gerassimos Bertsatos: University of Western Macedonia
Nicholas Tsounis: University of Western Macedonia

Chapter Chapter 33 in Advances in Empirical Economic Research, 2023, pp 527-543 from Springer

Abstract: Abstract The trading relationship between Germany and Russia is examined, and the effects of sanctions implemented on Russia due to the invasion of Ukraine on the German economy are investigated. A computable general equilibrium (CGE) model is developed to quantify the implications of the imposition of a quota on Russian imports and how Germany’s production activities alter due to reduced energy use from Russia. By simulating the quota scenario on the baseline model, the results indicated that energy use in Germany is reduced by around 20% thus, the output is reduced as well. This situation causes the energy haven effect to emerge, where firms may reallocate to countries with laxer energy regulations and produce as usual.

Keywords: CGE model; General equilibrium; Russia; Energy; Energy haven; Germany (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-22749-3_33

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DOI: 10.1007/978-3-031-22749-3_33

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