How Europe’s manufacturing sector copes with energy price shocks

Following Russia’s invasion of Ukraine and a subsequent tripling of gas prices and doubling of electricity prices, there were widespread fears of the threat to European manufacturing. Yet new research by Lionel Fontagne, Philippe Martin and Gianluca Orefice shows that over the past three decades, firms have adapted quickly, strongly and through multiple channels to […]

The value of coalitions

New research shows how countries acting together when imposing sanctions can increase the effectiveness of the measures in terms of raising the economic costs for the target countries and increasing the potential for deterrence. The study by Sonali Chowdhry, Julian Hinz, Katrin Kamin and Joschka Wanner, which examines the role of coalitions in the context […]

Effects of sanctions on the target’s exchange rate

Exchange rate movements are not an appropriate metric of the success or failure of sanctions, but a reflection of the type and scale of the measures taken. That is one of the findings of new research by Barry Eichengreen, Massimo Ferrari Minesso, Arnaud Mehl, Isabel Vansteenkiste and Roger Vicquéry, which highlights the channels through which […]

Trade liberalisation boosts both economic activity and political violence

While agricultural trade liberalisation raises economic activity, it also triggers distributional conflict and increases political violence in emerging countries, according to new research by Francesco Amodio, Leonardo Baccini, Giorgio Chiovelli and Michele Di Maio. But political violence does not increase everywhere: the effects are larger in urban areas, in areas where production requires relatively few […]

Big economic impact of border changes on nearby regions

New evidence on the contrasting economic experiences of regions within Russia following the annexation of Crimea in 2014 confirms the idea that the removal or weakening of borders improves the outcomes of nearby regions, while the creation or closing of borders worsens them. The study by Kristian Behrens shows that regions in the north of […]

Effects of trade sanctions against Russia

While the costs to the European Union (EU) as a whole of a variety of trade sanctions on Russia are small, there are big asymmetries. In particular, small European countries that were satellite economies of the Soviet Union suffer enormously more than large West European economies, sometimes by several orders of magnitude. That is the […]

Power mismatches

Power mismatches increase the probability of ethnic conflicts, with groups that possess more military power than political power being particularly susceptible to participating in such conflicts. That is the central conclusion of new research by Massimo Morelli, Laura Ogliari and Long Hong. Their study finds that mismatched groups are more likely to take part in […]

Power-sharing agreements

Agreements made between former enemies in civil conflicts to share political power in the same government can have a significant impact in reducing the likelihood and intensity of violence. That is the central finding of new research by Hannes Mueller and Christopher Rauh. Comprehensive power-sharing agreements – which cover substantive issues made between parties that […]

Private sanctions against Russia

Asked to imagine that they were employees, shareholders or customers of a firm that continued to operate in Russia after the invasion of Ukraine, a large fraction of respondents to a June 2022 survey of a representative sample of Americans said that they would be willing to show their disapproval. That is among the findings […]

Strengthening sanctions on exports to Russia

The list of sanctions on Russia following its invasion of Ukraine has left the country too many supply alternatives, according to researchers at the Growth Lab at Harvard Kennedy School. Ricardo Hausmann, Ulrich Schetter and Muhammed Yildirim believe that a more coordinated approach could increase the cost to Russia by about 60% without any measurable […]