The Ukraine War's Multifaceted Economic Fallout

Sergei Karpukhin/TASS via Getty Images

Mohamed A. El-Erian
Project Syndicate, 2022
Level: beginner
Perspective: Neoclassical Economics
Topic: Development, finance, macroeconomics, resources, environment & climate, trade
Format: Essay
Link: https://www.project-syndicate.org/commentary/economic-policy-response-to-ukraine-war-by-mohamed-a-el-erian-2022-03

The article demonstrates that by their very nature, the economic sanctions levelled by Western and other countries against Russia inevitably will create adverse economic effects for the rest of the global economy, too. That does not only pertain to exploding energy as well as commodity prices, creating a stagflationary setting in industrialised countries; it will probably also entail debt restructurings in emerging countries negatively affected by tightening financial conditions.


Comment from our editors:

Mohamed El-Erian is one of the most astute analysts of macroeconomic developments in the world economy. His differentiation between direct, blowback, spillover, and systemic negative consequences of Western sanctions against Russia made here is very helpful to discern what economic fallout will probably follow from this war short, medium and long-term throughout the global economy. Financial sanctions, after all, are weapons potentially creating massive collateral damage, too.


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