A Russian Energy Import Boycott by Germany or the EU as a Policy Option?

Paul Welfens

Chapter Chapter 5 in Russia's Invasion of Ukraine, 2022, pp 95-98 from Springer

Abstract: Abstract In a study published in March 2022, several scientists examined how a possible boycott of Russia’s energy imports by Germany would affect the German economy (Bachmann et al., 2022)—according to their findings, a decline in real GDP of 0.5% to 3% is expected. Compared with the 4.5% drop in GDP in Germany in the corona recession of 2020, this initially appears to be a tolerable price to pay for an intended weakening of Russia’s economy and its ability to increase military spending and continue the war of aggression against Ukraine. It should be borne in mind, however, that Russia could forestall a boycott of energy imports by Germany, for its part, by implementing a partial or complete boycott of supplies of oil, gas, coal, and grain, and that Russia, moreover, could sell quantities of oil, gas, and coal that can no longer be sold in Germany at price discounts in the rest of the world economy. Incidentally, the modeling carried out by Bachmann et al. is not really a standard macroeconomic model as it is based on growth decomposition, which is an approach not really adequate for the problem under consideration. Of particular analytical interest could be a modified DSGE macro model with trade and direct investment (Roeger & Welfens, 2021, 2022), which consistently covers complex international effects or adjustment paths. In the event of an energy import embargo, Germany’s Bundesbank (2022) simulates a loss of real income of up to 5%; in addition, inflation would be 1.5 percentage points higher in 2022, and in 2023, there would be an additional inflationary push of a similar—perhaps slightly higher—magnitude.

Date: 2022
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:sprchp:978-3-031-19138-1_5

Ordering information: This item can be ordered from
http://www.springer.com/9783031191381

DOI: 10.1007/978-3-031-19138-1_5

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().