The Russia Economic Sanctions Impact World Economy

This paper examines the effects of the economic Russian Republic's sanctions on global trade, macroeconomic dynamics, and welfare losses by using a calibrated novel model of three groups sets of the global economy. These groups are Russia, the second imposing the sanctions (EU, UK and the United States) and the third group (Turkey, India and China Republic). We assume that each nation of the group has two spheres subject sanctioned, these are the gas and final necessary commodity product of consumer. We consider three different sanctions types: Financial, trade on Gas and trade sanctions on finished products or goods. We demonstrate that currency rate changes reflect the type of sanction and the direction of the consequent sectoral reallocation's within countries, rather than indicating the effectiveness of sanctions. Our welfare study shows that if the third nation group does not ratify the sanctions, the sanctioned country's welfare losses are greatly reduced, and the sanctioning country's welfare losses are increased, but the third country gains from not being associated with the sanctioning group nations. These results demonstrate the need for international sanction coordination but also its difficulties.