What if? The macroeconomic and distributional effects for Germany of a stop of energy imports from Russia

Bachmann, Rüdiger, Baqaee, David Rezza, Bayer, Christian, Kuhn, Moritz, Löschel, Andreas, Moll, Ben ORCID: 0009-0003-6067-359X, Peichl, Andreas, Pittel, Karen and Schularick, Moritz (2024) What if? The macroeconomic and distributional effects for Germany of a stop of energy imports from Russia. Economica, 91 (364). 1157 - 1200. ISSN 0013-0427

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Abstract

This paper discusses the economic effects of a potential cut-off of the German economy from Russian energy imports. We use a multi-sector open-economy model and a simplified approach based on an aggregate production function to estimate the effects of a shock to energy inputs. We show that the effects are likely to be substantial but manageable because of substitution of energy imports and reallocation along the production chain. In the short run, a stop of Russian energy imports would lead to an output loss relative to the baseline situation, without the energy cut-off, in the range 0.5% to 3% of GDP.

Item Type:	Article
Official URL:	https://onlinelibrary.wiley.com/journal/14680335
Additional Information:	© 2024 The Authors
Divisions:	Economics
Subjects:	H Social Sciences > HB Economic Theory
JEL classification:	F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy
Date Deposited:	02 Jul 2024 23:13
Last Modified:	19 Nov 2024 03:21
URI:	http://eprints.lse.ac.uk/id/eprint/124094

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