Iikka Korhonen (BOFIT) and Heli Simola (BOFIT) - From Sanctions to Price Surges: The Dynamics of Russia’s Import Prices

BOFIT-seminaarit

BOFIT Seminar - Iikka Korhonen (BOFIT) and Heli Simola (BOFIT) - From Sanctions to Price Surges: The Dynamics of Russia’s Import Prices

Abstract
We want to find out if restrictions on exports to Russia by the sanctioning countries have affected the prices of goods exported to Russia by third, non-sanctioning countries. We first compare the development of prices of sanctioned and non-sanctioned products from all countries to Russia in the pre- and post-invasion periods and check if the prices of sanctioned goods have risen more than prices of non-sanctioned goods. Then we focus on individual exporting countries, China and Türkiye, and compare the development of export prices of sanctioned and non-sanctioned products to Russia and other destinations. We find that prices of sanctioned products exported to Russia have increased more than prices of other exports. This suggests that sanctions are working in their stated purpose of limiting Russia’s access to goods it needs to continue its illegal war in Ukraine.

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