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on Confederation of Independent States |
| By: | Tadashi ITO |
| Abstract: | This paper evaluates the effectiveness of the EU’s post-2022 export embargoes on goods with potential military applications against Russia. Using HS6-level UN Comtrade data for 2019–2024, I first estimate gravity-style specifications and event-study designs that confirm a sharp and immediate contraction in direct EU exports of embargoed goods to Russia. I then propose a product-level identification strategy that links potential transit country’s imports of an HS6 product from the EU to its exports of the same product to Russia in the post-2022 period. The results indicate that (i) EU export controls substantially reduced direct shipments, (ii) some Caspian littoral countries and major non-sanctioning suppliers—China, India, and Turkey—expanded exports of comparable goods to Russia, and (iii) there is nuanced but limited evidence of roundabout trade, whereby sanctioned goods were exported from the EU to these Russia-friendly countries and then re-exported to Russia. These findings imply that the effectiveness of export embargoes hinges not only on the scope of the listed items but also on enforcement that targets high-risk transit routes and substitute suppliers. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:eti:dpaper:26036 |
| By: | Sergey Belev (RANEPA); Konstantin Vekerle (RANEPA); Sergey Sinelnikov (VAVT) |
| Abstract: | The issue of tax burden distribution among the population is frequently discussed in Russia. In particular, some authors argue that the VAT burden is regressive and advocate for expanding the list of goods subject to the reduced VAT rate. However, most of these studies focus on comparing aggregate consumption and disposable income as tax bases. This paper, by contrast, concentrates on identifying which categories of expenditure in Russia are subject to progressive or regressive VAT treatment, as such estimates can inform proposals for specific tax design reforms. To analyse the structure of VAT burden distribution, data from the Russian Longitudinal Monitoring Survey (RLMS), conducted by the Higher School of Economics, is employed. Total consumption expenditure is divided into the following categories: current consumption, expenditure on durable goods, investments in human capital, and spending on entertainment and leisure. Based on the distributional analysis, it is found that the structure of household consumption remained stable over the period from 2007 to 2019. During periods of declining income, a decrease in the progressivity of the VAT scale is observed. This is due to higher-income groups reducing their expenditure on durable goods in favour of current consumption and investments in human capital – both of which are often subject to zero or reduced VAT rates. Among all categories, only investments in human capital display a regressive VAT burden distribution. VAT design proves to be progressive for spending on leisure and entertainment, primarily due to the inclusion of expenditure on tourist trips, which are subject to the standard VAT rate. |
| Keywords: | Russian economy, tax burden, VAT, distributional analysis, disposable income, consumption expenses, investments in human capital |
| JEL: | E62 H21 H22 H24 H31 H71 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:gai:ppaper:ppaper-2025-1509 |
| By: | Yevheniia Bondarenko; Nayeon Kang; Vivien Lewis; Matthias Rottner; Yves Schueler |
| Abstract: | Geopolitical risk is a major concern for the euro area, yet widely used measures largely reflect a US perspective. We introduce a geopolitical risk indicator tailored to the euro area using local European news sources. Shocks to this index have significant recessionary and inflationary consequences in the euro area, effects that would be missed when relying on the corresponding US-based measure. We estimate that the war in Ukraine imposed substantial output losses and inflationary pressures on the euro area in 2022. Combining structural scenario analysis with end-of-sample nowcasting, we show that euro area prospects are highly sensitive to future developments in geopolitical risk. We complement these analyses with two news-based measures of sanctions intensity and shortages for the euro area. |
| Keywords: | euro area, geopolitical risk, inflation, sanctions, shortages |
| JEL: | E31 E32 F42 F51 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:bis:biswps:1348 |
| By: | Luigi Capoani; Margarita Shnaider; Piergiorgio Martini |
| Abstract: | This paper investigates how geopolitical conflict reshapes trade patterns, focusing on the economic consequences of the Russo-Ukrainian war on European and global trade flows. War is conceptualized as a shock that increases bilateral trade costs within a structural gravity model, rather than as a force acting against trade flows, amplifying frictions in territories closer to the epicenter and reducing the economic attractiveness of major trade routes. The empirical analysis combines an Extended Gravity Model based on bilateral trade data from 2019 and 2023 with geographic, institutional, and political factors, including sanctions regimes and energy specialization. The findings show that war not only reduces trade volumes but also operates multiplicatively on trade frictions, influencing both the intensity and direction of trade disruptions, with more pronounced effects in the central corridors of the European market. As a result, some trade relationships collapse while others are redirected towards less exposed regions; furthermore, policy choices are decisive in shaping trade flows and contribute to isolating the Russian economy by creating a policy-induced trade void around the target country, while mechanisms such as the EU Single Market facilitate the internal reallocation of trade flows, preserving economic cohesion. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.16334 |
| By: | David R. DeRemer (Nazarbayev University, Graduate School of Business); Venkat Subramanian (Nazarbayev University, Graduate School of Business); Aigerim Yergabulova (Nazarbayev University, Graduate School of Business) |
| Abstract: | The global value chain (GVC) approach offers valuable insights for resource-rich states pursuing economic diversification and enhanced resilience, due to its strengths in analyzing how policy shapes the tasks and linkages of state-owned enterprises (SOEs). By examining how state roles affect SOEs, we gain insights for diversification policy through economic upgrading analysis and resilience policy via a multi-level perspective. Drawing on the case of Kazakhstan before and after the shocks of the Russia-Ukraine war and the COVID-19 pandemic, we analyze two contrasting sectors engaged in GVCs: uranium, an advantaged resource sector where the sovereign wealth fund (SWF) owns the key producer, and medicines, a disadvantaged non-resource sector where a state-owned firm is the key buyer. Our upgrading analysis of pre-shock policies in the uranium case shows that a SWF-facilitated transformation improves diversification, while in the medicine case, policy interventions through the state-owned firm yield diversification limited to state priorities. Our resilience analysis of post-shock policies reveals that in both cases, state interventions created unintended consequences for the resilience of firms and GVC, hindering GVC rebalancing and prompting strategic firm responses to mitigate adverse impacts. Our study suggests that state policies for resilience could better internalize these unintended consequences. |
| Keywords: | Global value chains, Industrial policy, Emerging markets/countries/economies, Economic diversification, Industrial upgrading, Resilience, Sovereign wealth funds, Privatization, Public procurement, Case-theoretic approaches |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:asx:nugsbw:2025-05 |
| By: | Yuvana Jaichand (Department of Economics, University of Pretoria, Pretoria, South Africa); Onur Polat (Institute of Informatics, Hacettepe University, Ankara, Turkiye); Renee van Eyden (Department of Economics, University of Pretoria, Pretoria, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa) |
| Abstract: | This study examines the impact of trade policy uncertainty of the United States (US) on the transmission and amplification of supply bottleneck shocks across major global economies. Utilising daily data spanning from January 15, 2010, to March 15, 2025, we employ a time-varying parameter vector autoregressive (TVP-VAR) framework to analyse the dynamic interconnections of supply bottlenecks at the country level. Furthermore, we evaluate the directional predictability of systemic spillover risk originating from US trade policy uncertainty through the application of the cross-quantilogram methodology. The connectedness results show that supply bottleneck spillovers are strongly time-varying and rise sharply during major global disruptions, particularly the COVID-19 pandemic, the US-China trade war, and the Russia-Ukraine war. Directional spillovers indicate that the US and China are the main net transmitters of shocks, while European economies and the United Kingdom (UK) are generally net receivers. The quantile-based results further show that US trade policy uncertainty has significant predictive power for supply bottleneck connectedness, especially in the upper quantiles where spillover intensity is elevated. This causal relationship remains robust after controlling for broader adverse supply-side effects. Our findings suggest that US trade policy uncertainty amplifies systemic supply-chain stress, thereby stressing the importance of understanding supply bottlenecks as an interconnected phenomenon rather than as isolated domestic disruptions. |
| Keywords: | Trade Policy Uncertainty, Supply Bottlenecks, TVP-VAR, Cross-Quantilogram, Connectedness, Predictability |
| JEL: | C22 C32 D80 E23 F13 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:pre:wpaper:202614 |
| By: | Bondarenko, Yevheniia; Kang, Nayeon; Lewis, Vivien; Rottner, Matthias; Schüler, Yves |
| Abstract: | Geopolitical risk is a major concern for the euro area, yet widely used measures largely reflect a US perspective. We introduce a geopolitical risk indicator tailored to the euro area using local European news sources. Shocks to this index have significant recessionary and inflationary consequences in the euro area, effects that would be missed when relying on the corresponding US-based measure. We estimate that the Russo-Ukrainian War imposed substantial output losses and inflationary pressures on the euro area in 2022. Combining structural scenario analysis with end-of-sample now-casting, we show that euro area prospects are highly sensitive to future developments in geopolitical risk. We complement these analyses with two news-based measures of sanctions intensity and shortages for the euro area. |
| Keywords: | euro area, geopolitical risk, inflation, sanctions, shortages |
| JEL: | E31 E32 F42 F51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubdps:341100 |
| By: | Silva Neira, Ignacio; Pédussel Wu, Jennifer |
| Abstract: | In 2024, new members joined the original BRICS countries, reinforcing their aspirations as a relevant global actor. This study examines Latin American countries' export structures orientation towards BRICS versus G7 markets. Using a unique dataset and a structural gravity model, we estimate the determinants of export intensity with a focus on the technological content of traded goods and assess whether integration with these two blocs offers distinct pathways for upgrading into higher-value segments of trade. Our findings reveal persistent structural constraints: while both blocs demand resource-intensive exports from Latin America, opportunities to expand midand high-tech exports remain limited. Results suggest that R&D activities and domestic technological capacities do not translate into greater high-tech export performance, highlighting structural difficulties of Latin American economies moving up the value chain and that global trade remains shaped more by the nature of demand in destination markets than by technology adoption at home. |
| Keywords: | China, BRICS+, trade, investment, technical goods and innovation |
| JEL: | F14 F53 F61 O33 O38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:341098 |