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on Confederation of Independent States |
| By: | Hausmann, Ricardo; Schetter, Ulrich; Yıldırım, Muhammed A. |
| Abstract: | We analyze the effects of bans on exports at the level of 5, 000 products and show how our results can inform economic sanctions against Russia after its invasion of Ukraine. We begin with characterizing export restrictions imposed by the EU and the US until mid-May 2022. We then propose a theoretically-grounded criterion for targeting export bans at the 6-digit HS level. Our results show that the cost to Russia are highly convex in the market share of the sanctioning parties, i.e., there are large benefits from coordinating export bans among a broad coalition of countries. Applying our results to Russia, we find that sanctions imposed by the EU and the US are not systematically related to our arguments once we condition on Russia’s total imports of a product from participating countries. Quantitative evaluations of the export bans show (i) that they are very effective with the welfare loss typically ∼100 times larger for Russia than for the sanctioners. (ii) Improved coordination of the sanctions and targeting sanctions based on our criterion allows to increase the costs to Russia by about 60% with little to no extra cost to the sanctioners. (iii) There is scope for increasing the cost to Russia further by expanding the set of sanctioned products. |
| Keywords: | Russia; Sanctions; Ukraine |
| JEL: | F13 F51 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21223 |
| By: | Ayers, Natalie; Blair, Christopher; Ruggiero, Joseph; Wright, Austin L.; Sonin, Konstantin |
| Abstract: | When leaders face threats to their authority, escalating foreign conflict can help divert public attention away from domestic grievances. We develop a formal microfoundation for diversionary escalation rooted in a theory of regime change. Although the idea of diversionary escalation is classic, systematic quantitative evidence has been challenging to obtain. Using a new data set of 1.8 million conflict incidents, obtained from the Organization for Security and Co-operation in Europe's (OSCE) Special Monitoring Mission to Ukraine in 2015--2022, we find evidence that the Russian government strategically employed proxy-initiated separatist violence in Eastern Ukraine to divert attention from domestic unrest and opposition-led protest. We also find a positive link between opposition protest and inflammatory anti-Ukrainian coverage in the Russian media, complementary to battlefield escalation. |
| JEL: | D74 D82 O1 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21092 |
| By: | Mayer, Thierry; Mejean, Isabelle; Thoenig, Mathias |
| Abstract: | We use the framework of Mayer, Méjean and Thoenig (2025) to study the geopolitical relationship between Russia and Ukraine. The model embeds diplomacy and war within a quantitative trade framework to estimate: (i) the model-implied probability of conflict over time, and (ii) the impact of different sanction regimes on this probability. We first calibrate the model under a war scenario based on data relevant to the post-February 2022 full-scale conflict, and then add counterfactual sanctions to this scenario. We find that the observed Ukraine’s decoupling from Russia after the 2014 annexation of Crimea reduced its economic exposure to war but also increased the likelihood of a full-scale conflict by lowering its opportunity cost of war. Simulation results show that the 2024 sanction package, if credibly announced in 2021 and made contingent on further aggression, would have significantly raised Russia’s cost of war and could have deterred the 2022 invasion. |
| Keywords: | International trade; interstate conflict; Russia; Ukraine; Geoeconomics |
| JEL: | F1 F5 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21007 |
| By: | Vezina, Pierre-Louis; Aksoy, Cevat Giray; Lewandowski, Piotr |
| Abstract: | We examine business creation by Ukrainian refugees in Poland following the Russian invasion of Ukraine. Using registry data, we show that Ukrainians started 38, 833 firms in 2022–23, accounting for 7% of all new registrations in Poland. We link this entrepreneurship to refugees in two ways. First, our survey shows that 58% of post-invasion Ukrainian founders registered as refugees. Second, cross-county regressions show that a 10% increase in adult male Ukrainian refugees is associated with a 2.71% increase in Ukrainian firm registrations. We then show that new Ukrainian businesses stimulate rather than crowd out Polish entrepreneurship. Using a shift-share strategy based on refugee shocks and Ukrainians’ comparative advantage, we find that a 10% increase in Ukrainian registrations led to 2.31% more Polish firms. Survey evidence suggests two mechanisms: emulation, with 59% of Ukrainian owners reporting Polish entrepreneurs starting similar firms, and supply-chain linkages, with 88% of Ukrainian firms engaged in local business-to-business transactions. |
| Keywords: | Migration; Firms; Multiplier |
| JEL: | F22 L26 O15 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20854 |
| By: | Corneo, Giacomo |
| Abstract: | NATO enlargement and Russian annexation of Crimea marked crucial turning points. According to one narrative, the Russian occupation was part of a plan to re-establish dominion over Eastern Europe. According to a rival view, it was an attempt to counter a U.S. plan to subjugate Russia. I scrutinize the logical requirements of those narratives in a multi-stage game of incomplete information that produces equilibrium play such that first NATO is enlarged and then Russia attacks Ukraine. The two competing narratives correspond to two different separating equilibria. Conditions for their existence inform about the consistency and plausibility of the associated narratives. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21183 |
| By: | Gorodnichenko, Yuriy; Obstfeld, Maurice |
| Abstract: | The monumental task of rebuilding postwar Ukraine requires early planning and identification of growth strategies. The earlier accession of Eastern European countries to the European Union and NATO offers a template that relies on massive foreign direct investment and public structural funds. This approach helps to raise incomes directly and can create a virtuous circle where capital deepening facilitates technological upgrades and repatriation of war refugees, which in turn stimulate more investment. We show theoretically that the government can refine this strategy by internalizing positive externalities from having a higher capital stock: Investment in physical capital relaxes borrowing constraints (thus allowing more capital inflows) and raises wages (thus encouraging more Ukrainian refugees to return home). |
| Keywords: | Ukraine; Conflict; Reconstruction; Capital flows; Economic growth |
| JEL: | E2 F2 F5 P2 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21000 |
| By: | Adam, Christopher; Luk, Paul; Vines, David |
| Abstract: | This paper shows that coordination of monetary policy and fiscal policy can be desirable in the face of a temporary supply side shock. To calibrate our study we use the sharp rise – and subsequent reversion - of energy prices as a result of Russia’s invasion of Ukraine in early 2022. We take as the objective of policy the control of inflation, and the avoidance of a wage-price spiral, without it being necessary to greatly increase interest rates. We show how such a coordinated strategy could make use of a temporary subsidy to consumption following the energy-price shock. We demonstrate that it would be possible to follow such a strategy without creating either excess demand in the short run or Ponzi-game-like fiscal outcomes in the longer run. Our model is a modified version of the new-Keynesian DSGE model due to Christiano, Eichenbaum and Evans (2005) and Smets and Wouters (2007), to which we have added a fiscal-policy process and an energy-sector enclave. We examine the macroeconomic and welfare outcomes of our policy strategy. We show why the welfare outcomes might be better than those which would emerge in the absence of any consumption subsidy, in which case monetary policy would be the only means used to control inflation. We discuss broader implications of our results in the concluding section of the paper. |
| Keywords: | Energy-price shock; Inflation targeting; energy-price subsidy; fiscal and monetary cooperation ; real wage resistance |
| JEL: | E31 E47 E52 E61 E62 E65 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21147 |
| By: | Adema, Joop; Aksoy, Cevat Giray; Giesing, Yvonne; Poutvaara, Panu |
| Abstract: | Despite rising refugee numbers worldwide, refugees’ return decisions remain poorly understood. Prior work examines either intentions or realized return, but not both. We fielded a ten-wave panel of Ukrainian refugees, linking prewar home municipalities to geocoded conflict and territorial control data and eliciting war expectations. Intentions strongly predict behavior: by 2025, 42% of those planning to return soon in 2022 had returned, versus 1% of those planning to settle abroad. Increasing conflict in the home municipality reduces return there but barely affects return to Ukraine overall. More pessimistic war expectations explain 21% of the decline in return intentions. |
| Keywords: | Ukraine |
| JEL: | D74 F22 J15 J24 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21288 |
| By: | L. Randall Wray |
| Abstract: | The press is full of stories on the cost of President Trump's war of choice against Iran--said to be running at $2 billion a day. With an on-again, off-again ceasefire, that cost may have declined at least temporarily. However, many reports suggest that America's inventory of firepower has been run down by the war in Ukraine plus this latest adventure. Each Tomahawk missile cost about $2 million dollars to make, but at today's costs, replenishing the stockpile could run closer to $4-5 million for each missile. The Patriot missile systems used to shoot down Iranian drones cost about $1 billion each. Typically, two or more missiles are used to take out each drone, so it costs "anywhere from $500, 000 to $4 million" to dispatch a drone that cost $20, 000 to $35, 000--a daunting ratio (Silver 2026; Pow 2025). |
| URL: | https://d.repec.org/n?u=RePEc:lev:levypn:26-3 |
| By: | Hohendanner, Christian (Institute for Employment Research (IAB), Nuremberg, Germany); Zimmermann, Florian (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "The labour market integration of refugees has seldom been studied from the employers’ perspective. To address this gap, this research report utilizes data from the IAB Establishment Panel to examine which establishments employ refugees, focusing on a comparison of two distinct phases of refugee migration to Germany. Specifically, it examines the years 2017–2018, following the onset of the Syrian civil war, and 2022–2025, following the Russian invasion of Ukraine. Beyond changes over time, the report also examines the distribution of refugees across industries, sectors, establishment sizes, and regions. The IAB Establishment Panel enables a representative analysis of the employer side – a perspective that has remained underrepresented in previous research. A key finding is that despite substantial differences in demographic composition between the two cohorts, the establishments employing them are surprisingly similar. While refugees from 2015 were predominantly young men with lower levels of formal education, women are overrepresented among Ukrainian refugees, who also possess higher formal qualifications. Nevertheless, the distribution across industries of both groups remains remarkably alike. Potential explanations include shared language barriers and the lack of recognition for foreign qualifications, both of which hinder access to jobs commensurate with their skill levels. In both migration phases, refugee employment is concentrated in a few industries with low formal entry requirements. Temporary agency work (16 to 26 percent) and accommodation and food services (14 to 18 percent) are particularly overrepresented, despite these industries accounting for only 10 to 12 percent of total employment in Germany. In contrast, refugees are underrepresented in industries with demanding language and qualification requirements, such as healthcare, public administration, and business services. Notably, this underrepresentation persists for Ukrainian refugees in the female-dominated social sector, despite high labour demand and the high proportion of women in this cohort. Regarding establishment size, refugees from both cohorts are more likely to find work in small and medium-sized enterprises (SMEs) than in large establishments, even though the latter represent a larger share of overall employment." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; Syrien ; Ukraine ; berufliche Qualifikation ; Beschäftigungsentwicklung ; Betriebsgröße ; Einfacharbeit ; Erwerbsquote ; Geflüchtete ; Herkunftsland ; IAB-Betriebspanel ; IAB-Betriebspanel ; Leiharbeit ; Anerkennung ; Personaleinstellung ; regionaler Vergleich ; sektorale Verteilung ; Niedriglohnbereich ; Sprachbarriere ; 2017-2025 |
| Date: | 2026–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabfob:202607 |
| By: | Glaeser, Edward; Kirchberger, Martina; Parkhomenko, Andrii |
| Abstract: | This paper discusses the rebuilding of Ukrainian cities. We start by outlining key facts about Ukraine and its cities: (i) the country's population is declining; (ii) there is a shift in demand for housing from east to west; (iii) Kyiv's advantage is growing; (iv) house prices are rising in Kyiv and western cities; (v) Ukraine's cities are slow and congested. We then present a theoretical framework for maximizing the benefits of Ukraine's rebuilding effort to highlight the welfare effects of different allocations of post-war infrastructure. Finally, we consider the cost curve for reconstruction, as determined, in particular, by the cost of materials, labor, the industrial organization of the building industry and public practices in procurement and regulation. We highlight three broad strategies for shifting the cost curve: openness, standardization and investing-in-investing. We conclude by outlining areas for future research. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21086 |
| By: | Brzezinski, Adam; Garicano, Luis |
| Abstract: | Political narratives on climate policy have turned more skeptical despite mounting evidence of climate urgency. We explain this shift with a theory of narrative entanglement: to appeal to voters, politicians intertwine economic and environmental narratives rather than treating them separately. Hence, shocks unrelated to climate change can impact environmental narratives. We test our theory in the context of Russia’s invasion of Ukraine, which affected the economic costs of the European Green Deal without changing its impact on emissions. We use large language models to identify climate narratives across all speeches in the 9th European Parliament (2019-2024). Exploiting only variation within each parliamentarian, we show that after the invasion, narratives become both more negative in the cost assessments of climate policies and more skeptical about their environmental impact. |
| Keywords: | Narratives |
| JEL: | D72 D91 Q58 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20829 |
| By: | Arellano-Bover, Jaime; San, Shmuel |
| Abstract: | We study how job mobility, firms, and firm-ladder climbing can shape immigrants’ labor market success. Our context is the mass migration of former Soviet Union Jews to Israel during the 1990s. Once in Israel, these immigrants faced none of the legal barriers that are typically posed by migration regulations around the world, offering a unique backdrop to study undistorted immigrants’ job mobility and resulting unconstrained assimilation. Rich administrative data allows us to follow immigrants for up to three decades after arrival. Immigrants experienced large initial wage gaps relative to natives - 57% for men and 47% for women - and 12-20% of these gaps are explained by differential sorting across firms and differential pay-setting within firms. The wage gap closes only after 27-29 years, and much of this convergence is driven by immigrants’ differential climbing of the firm ladder: immigrants are more mobile and experience faster upward moves, even in the long term. As such, firm-to-firm mobility is a key driver of these immigrants’ long-run prosperity. Lastly, we quantify a previously undocumented job utility gap when accounting for non-wage amenities. Upon arrival, immigrants’ non-pay amenities were lower by 0.38 (men) and 0.94 (women) native standard deviations. As such, amenities exacerbate immigrant-native disparities based on pay alone. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:21185 |
| By: | Oleg Gurshev (Group for Research in Applied Economics (GRAPE); CASE, Warszawa, Poland; Faculty of Economic Sciences, University of Warsaw, Warszawa, Poland) |
| Abstract: | This paper investigates the impact of an export demand shock triggered by the 2014 Russian import ban on labor earnings in Poland. We implement an event-study using traditional and doubly-robust difference-in-differences estimators, supplemented by a variance decomposition. Our findings indicate that the shock has caused substantial consequences for regional inequality. Specifically, we document a persistent decline in average relative earnings between the exposed group of counties and the rest of the country. The analysis of between-group variance shows that the import ban has reduced the earnings premium, shifting the exposed counties from relatively higher-earnings positions toward the national average. |
| Keywords: | Poland; Russian import ban; economic sanctions; regional inequality; local labor markets; difference-in-differences |
| JEL: | F16 F51 J31 R23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:fme:wpaper:118 |
| By: | Fabre, Adrien |
| Abstract: | Using an original survey of 12, 000 respondents representative of eleven high-income countries (the United States, Japan, Russia, Saudi Arabia, and seven European countries), I examine public support for global redistribution and climate policies, as well as its sensitivity to key policy features such as the size of transfers and country coverage. Although global inequality is not a salient concern, it is perceived as a significant injustice. There is majority acceptance in every country for nearly all global policies tested, including those that would redistribute 5 percent of global income or entail personal costs for respondents. An information treatment shows that support for global policies causally increases among respondents who perceive them as likely; an effect opposite to warm glow. Support for international policies decreases only slightly as country coverage shrinks. Overall, the results reinforce previous findings and suggest that a broad coalition of countries could feasibly advance sustainable development. |
| Keywords: | Redistribution |
| JEL: | P48 Q58 H23 Q54 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20841 |
| By: | Polterovich, Victor |
| Abstract: | This paper examines the potential for using artificial intelligence (AI) as a general purpose technology and analyzes the reasons why its use may slow down the growth of public welfare. One of the most important reasons is the increase in inequality, which contributes to the activation of postmodern social movements that deny scientific knowledge and the principle of meritocracy. We argue that effective AI adoption in both developed and developing economies requires institutional transformations that limit competition by strengthening the role of collaborative mechanisms. Countries that fall within the intersection of "coordinated market economies" and "stakeholder capitalism" classes have the greatest chance of success in such transformations. Developing collaborative mechanisms is also essential in intercountry interactions to prevent the nascent arms race based on military AI implementation. Furthermore, a system of agreements between countries is needed to limit the impact of AI on the environment. In Russia, the use of AI can facilitate the development and coordination of national projects, the formation of domestic value-added networks within VAN- consortia, the reduction of interregional inequality in the quality of education and healthcare, and the creation of institutions of catching-up development. To achieve these goals and prevent the threat of increased unemployment, close collaboration between educational organizations, the state, and private companies is necessary. |
| Keywords: | general purpose technology, distorted innovations, cultural dissonance, economic growth, arms race. |
| JEL: | O30 O32 O33 O38 O43 |
| Date: | 2026–02–28 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128245 |
| By: | Markevich, Andrei; Santavirta, Torsten |
| Abstract: | During the Soviet Union’s First Five-Year Plan, Western know-how and technology were extensively infused into industry through technical assistance agreements and work contracts with specialists and foreign companies. We study the causal effects of this purposeful state-led policy on labor productivity using the largest single recruitment effort of Western expertise, namely Karelian Technical Aid. This allows us to exploit exogenous variation in transfer of technology within one sector: the wood processing industry. Combining detailed individual-level data on over 5, 000 North American specialists with a novel panel of accounting data on the universe of Soviet enterprises in Karelia and the Northern Region during the interwar period, we document large and persistent causal productivity gains. Important drivers of successful technology absorption were local human capital and the absence of language barriers. |
| Keywords: | Industrial policy; Technology; Technical assistance |
| JEL: | J24 N64 O14 O3 P2 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:20811 |