Economic Costs of Sanctions on Russia | Analysis & Impact
A study published this year by the Kiel Institute for the World Economy estimates that sanctions imposed on Russia between 2014 and 2019 resulted in a 0.3% loss of real income for Russia. The research, conducted by Lisandra Flach, Inga Heiland, Mario Larch, Marina Steininger, and Feodora Teti, quantifies both the partial and general equilibrium effects of these measures and the subsequent countersanctions implemented by Moscow.
The analysis, detailed in a paper available on the researchers’ website, utilized a gravity framework to assess the impact on trade, accounting for variations in treatment among different country pairs and sectors. The study found that Russian imports decreased by 10.85% across 170 industries, according to data cited in the research.
Researchers determined that a complete decoupling of the European Union and its allies from the Russian economy could increase the income loss for Russia to over 4%. This finding underscores the potential impact of escalating sanctions as a foreign policy tool and the importance of international cooperation in maximizing their effectiveness. The study explicitly evaluates the effects of sanctions and countersanctions, rather than attempting to predict future outcomes.
The Kiel Institute’s work builds upon previous research by Felbermayr, Syropoulos, Yalcin, and Yotov (2019) on the effects of sanctions on trade and welfare, utilizing a structural gravity model and a new database. The current study’s findings are published in the Review of International Economics, with a February 2024 issue featuring the full analysis by Flach, Heiland, Larch, Steininger, and Teti.
The research team’s abstract notes the estimation of elasticities within a general equilibrium analysis, providing a detailed economic assessment of the sanctions’ impact. As of February 26, 2026, no further public statements have been released by the Kiel Institute regarding updated analyses or expanded research on the economic consequences of ongoing sanctions.