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Input-Output Analysis of the Ukraine War: A Tool for Assessing the Internal Territorial Impacts of the Conflict

Author

Listed:
  • Haddad, Eduardo

    (Departamento de Economia, Universidade de São Paulo)

  • Araujo, Inacio

    (Departamento de Economia, Universidade de São Paulo)

  • Rocha, Ademir

    (Departamento de Economia, Universidade de São Paulo)

  • Sass, Karina

    (Departamento de Economia, Universidade de São Paulo)

Abstract

The Russian invasion of Ukraine on February 24, 2022, scaled up the ongoing conflict in Donbas beyond its regional borders, hindering and halting different aspects of economic life. Considering the internal geography of Ukraine’s economic structure, the damages to physical infrastructure and supply chain disruptions are likely to propagate to other parts of the country through an intricate plot of production and income linkages. From a disaggregated analysis of multiregional and multisectoral linkages, this paper offers a systematic, integrated account of the structural linkages that allows modeling spillovers from one Ukrainian region to another. This approach breaks new ground by highlighting the internal economic effects of the conflict in Ukraine. We develop an interregional input-output system for Ukraine, providing the numerical basis for developing analytical frameworks to support knowledge building in the recovery process of distressed territories during the post-war period. We offer this database to the international scientific community to support modeling projects focusing on structural features of the Ukrainian economy. As shown in our illustrative exercises, understanding the structure of intersectoral and interregional linkages is critical to understanding better the propagation of exogenous shocks in the economy.

Suggested Citation

  • Haddad, Eduardo & Araujo, Inacio & Rocha, Ademir & Sass, Karina, 2022. "Input-Output Analysis of the Ukraine War: A Tool for Assessing the Internal Territorial Impacts of the Conflict," TD NEREUS 5-2022, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    • Handle: RePEc:ris:nereus:2022_005
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    References listed on IDEAS

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    1. Eduardo A. Haddad & Fatima Ezzahra Mengoub & Vinicius A. Vale, 2020. "Water content in trade: a regional analysis for Morocco," Economic Systems Research, Taylor & Francis Journals, vol. 32(4), pages 565-584, October.
    2. Eduardo Amaral Haddad & Natalia Cotarelli & Thiago Cavalcante Simonato & Vinicius Almeida Vale & Jaqueline Coelho Visentin, 2020. "The Grand Tour: Keynes and Goodwin go to Greece," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-21, December.
    3. Eduardo A. Haddad & Nadim Farajalla & Marina Camargo & Ricardo L. Lopes & Flavio V. Vieira, 2014. "Climate change in Lebanon: Higher-order regional impacts from agriculture," REGION, European Regional Science Association, vol. 1, pages 9-24.
    4. Afaf Zarkik, 2022. "Guerre en Ukraine et sanctions contre la Russie : quel avenir pour le pétrole ?," Policy notes & Policy briefs 1984, Policy Center for the New South.
    5. Dario Caldara & Sarah Conlisk & Matteo Iacoviello & Maddie Penn, 2022. "The Effect of the War in Ukraine on Global Activity and Inflation," FEDS Notes 2022-05-27-2, Board of Governors of the Federal Reserve System (U.S.).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Input-output model; Europe; National Security; War;
    All these keywords.

    JEL classification:

    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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