Effects of an embargo on Russian gas

Question 1: By how much would an immediate EU-wide import ban on Russian gas reduce German GDP growth per annum in 2022-3, in percentage points (pp), absent other policies?

Question 2: By how much would an immediate EU-wide import ban on Russian gas reduce German GDP growth per annum in 2022-3, in percentage points (pp), if the government offset the costs with a well-targeted fiscal policy?

Question 3: By how much would an immediate EU-wide import ban on Russian gas reduce EU GDP growth per annum in 2022-3, in percentage points (pp), absent other policies?

Summary

The majority of the CfM-CEPR panel of experts on the European economy assesses that an embargo on Russian gas would cut 1 to 3 percentage points from German GDP growth a year in 2022-3, if the German government offsets the costs with will-targeted fiscal policy. Estimates increase if the German government were to take no offsetting action, with the panel equally split between those assessing the damages in the 1 to 3 percent range and those assessing them to be in the 3 to 5 percent range. A large majority thinks that the EU could weather such a ban with costs in the 1 to 3 percent range, even absent offsetting fiscal or monetary measures.

Background

The April 2022 CfM survey asked the members of its European panel to assess the effects of an embargo on Russian gas on the German and EU economies.

German dependence on Russian oil and gas

Western policymakers were taken by surprize by the full-fledged Russian invasion of Ukraine. Policy responses from NATO allies were also more forceful than most had anticipated, with wide-ranging sanctions, and military and humanitarian aid to Ukraine in the tens of billions of euros .  Sanctions have already hurt the Russian economy, with the IMF predicting an 8.5% decline in Russia’s GDP this year. Some commentators have urged Western allies to do more to support Ukraine and Germany in particularly has been in the spotlight as a country with substantial leverage. Fossil fuel exports accounted for more than a third of Russia’s total budget, with half that sum coming from Europe, primarily Germany. A German ban on Russian oil and gas imports could have a material economic impact on the Russian economy, as argued by Oleg Itskhoki and Sergei Guriev. Others, including Ricardo Hausman have argued for a less extreme tax on Russian oil, but this article focuses on the effects of a full embargo.

Is a German ban of Russian oil feasible? Currently about up to 55% of German gas imports and 14% of its total energy imports come from Russia. Gas is seen as comparatively harder to substitute than coal and oil. Indeed, industry leaders from sectors ranging from chemicals to confectionaries have issued stern warnings that a sudden import ban would, “cause irreversible damage” to the German economy and “destroy what has been built in decades,” in the words of the CEO of German chemicals giant BASF. German economy minister Robert Habeck argues that disruptions to the production of basic inputs such as chemicals would cause a ripple effect across value chains, which would in fact lower Germany’s capability to support Ukraine with weaponry. The key problem as identified by opponents of an import embargo is the insufficient time to adapt production processes, which according to Mr. Habeck would lead to mass unemployment, poverty (perhaps suggesting a Great Depression type scenario) and cold homes. Similarly, the Association of the German Industry (BDI), that warns against “playing with fire” and harming the EU more than Russia, a claim echoed by German Chancellor Scholz during a TV interview.

The IMK, an economic think-tank close to trade unions, published a study that estimates the economic impact of a gas import ban to be at least 6% of German GDP in 2022 alone. For comparison, the recession due to the Covid-19 pandemic caused German GDP to fall by 4.6% in 2020. The Bundesbank estimates that the ban would lead to a drop of 5.1% in German GDP this year, and additional drops of 1.5% in the two upcoming years.

Other studies, however, point to a smaller impact of an import ban. Bachmann et al. (2022) use the Baqaee-Farhi (2021) model and estimate the cost to the German economy of merely 0.5 – 3% of German GDP. This takes into account some fiscal measures taken by the German government and monetary measures by the European Central Bank to contain further spread of the economic damage. This study is much more optimistic about the substitutability of Russian gas, in particular because it evaluates substitution from a macroeconomic perspective across the entire value chain. A study published by the German Institute for Economic Research DIW obtains a similar estimate of 3%. Finally, a joint study of five German economic research institutes and think tanks estimates GDP deviations relative to a no-import-stop baseline of -0.8% in 2022 and -5.3% in 2023 (so 3.05% on average across the two years) and year-to-year GDP changes of +1.9% in 2022 (i.e. a growing economy) and -2.2% in 2023. A paper by the German Council of Economic Experts (Berger et al 2022) warns that each estimate is based on different aspects of the damages to the German economy, so that the deductions to GDP resulting from the different scenarios could be additive. If so, the cumulative effect on GDP could be 3% to 6%.

The IMF forecasts German real economic growth to be 2.1% in 2022, down from its 4.3% forecast before the war, and 2.7% in 2023. Forecasts for the Euro Area are 2.8% in 2022, down from 5.2% previously, and 2.3% in 2023. These forecasts are under current policies, which don’t include a ban on Russian oil and gas.

The following questions ask you to estimate the impact of a full, immediate ban on the importation of Russian gas. In the first two questions, you are asked about the effect on Germany, but should assume that all EU countries, but no non-EU countries, ban Russian gas. In other words, the questions assume a unilateral, but EU wide, ban on Russian gas. In Question 2 the question is modified by asking how the ban would affect the economy with well-targeted fiscal policy. You may use the comments to suggest which fiscal actions, if any, could mitigate the social and/or economic costs of the ban on Russian oil. In Question 3 you are asked about the effect of a ban on the EU as a whole, returning to the scenario that no additional fiscal actions are taken. The baseline scenario is your current expectations of the severity and duration of the war, and current policies.

Question 1: By how much would an immediate EU-wide import ban on Russian gas reduce German GDP growth per annum in 2022-3, in percentage points (pp), absent other policies?

Most panellists agree that an immediate EU-ban on Russian gas would cause German GDP to fall, absent of other policies, with a roughly a third of the panel expecting a significant but contained decline of 1-3pp per year and slightly more than a third (41%) anticipating a more serious downturn of 3-5pp. A smaller fraction of 13% expect a major recession of 5-10pp. None of the respondents expects a decline of more than 10pp.

Panellists that expected lower damages around 1pp to 3pp per annum 2022-23 referred to the Bachmann et al (2022) study. Ben Moll (London School of Economics) summarizes this view: “The supply-chain model estimates the damage to be around 1%. Considering pessimistic parameterisations and safety margins for Keynesian mechanisms yields 3%, a number backed up by later studies that take additional such channels into account – although some are in the 3-5% range.” Richard Portes (London Business School and CEPR) adds that the Baqaee-Farhi model, the model framework Bachmann et al. (2022) build upon, is currently “the best supported estimate”.

Others, who viewed the damages as larger pointed to Germany’s great reliance on Russian oil and gas and that such damages come on top of already strained supply chains. As Jumana Saleheen (Vanguard Asset Management) puts it: “Germany is known to have a larger manufacturing sector than its EU counterparts. A shortage of gas supply is likely to lower manufacturing output and exacerbate an already disrupted global supply chain.” Volker Wieland (Goethe University Frankfurt, IMFS) notes that “German GDP is already roughly 2 percent below GDP of 2019 pre-corona crisis… At the same time inflation has been rising a lot, and an embargo could push inflation near two-digit levels.” Others argued that the great uncertainties surrounding current circumstances called for a conservative (large) estimate of the damages. Ramon Marimon (EUI, UPG-BSE) attributes his lack of confidence to vastly different outcomes depending on the implementation timeline. In his view a cold turkey embargo would have significant costs, but calls for a “clear commitment to a path towards a full ban.” Philip Jung (University of Dortmund) points to the chosen rationing mechanism as another critical factor, with a strategy that uses the price mechanism rather than rationing leading to smaller costs.

Question 2: By how much would an immediate EU-wide import ban on Russian gas reduce German GDP growth per annum in 2022-3, in percentage points (pp), if the government offset the costs with a well-targeted fiscal policy?

The inclusion of well-targeted fiscal policy induced a marked shift towards lower expected damage to German GDP growth and greater agreement among the panellists: About 60% of respondents anticipate an embargo-induced downturn of 1-3pp under such policies. The remaining panellists are roughly evenly split between those expecting a larger impact of 3-5pp (18% of respondents) and a smaller effect of less than 1% (13%).

The majority view is summarized by Eran Yashiv (Tel Aviv University, CfM) who states that “fiscal policy could compensate for some of the downfall”. Jumana Saleheen (Vanguard Asset Management) agrees that the effects of an embargo “could prompt a large fiscal package which could offset most, but not all of the fall in output”.

Others thought that fiscal policy can do little in face of a gas ban. Volker Wieland (Goethe University Frankfurt, IMFS) writes that “Demand side policies cannot fix this. It's not a liquidity problem that needs to be managed with loans from the ECB or the government. A major long-term re-organisation of industrial production is necessary and some companies will drop out and gas dependent sectors decline. This takes time.” He also warns of monetarising debt: “Large increases in debt monetized by the ECB would simply further raise inflation on top of the cost-push shock. This is quite different from the Corona shock, which was disinflationary.” Benjamin Moll (LSE) thinks that “well-targeted fiscal policy could arguably undo some of the Keynesian aggregate demand amplification discussed there. At the same time, this is still fundamentally a negative shock to aggregate supply so fiscal policy would not be able to *undo* the shock and reduce GDP losses below the 1% to 3% range. I would argue that GDP losses with well-targeted fiscal policy would likely lie somewhere in the 1% to 2.5% range.”

Question 3: By how much would an immediate EU-wide import ban on Russian gas reduce EU GDP growth per annum in 2022-3, in percentage points (pp), absent other policies?

A majority of the panel (63%) put the damages to the EU in the 1 to 3 percent range, with the remainder of the panel nearly evenly split between larger and smaller estimates. There was general agreement that an oil ban would affect other EU members less than Germany.

References and Further Readings:

Bachman, Rüdiger, David Baqaee, Christian Bayer, Moritz Kuhn, Andreas Löschel, Benjamin Moll. Andreas Peichl, Karen Pittel, and Moritz Schularick, (2022) “What if? The Economic Effects for Germany of a Stop of Energy Imports from Russia” ECONtribute policy brief no. 028.

Baqaee, David and Emmanuel Farhi (2021): “Networks, Barriers, and Trade”, working paper

Berger, Eva, Sylwia Bialek, Niklas Garnadt, Veronika Grimm, Lars Other, Leonard Salzmann, Monika Schnitzer, Achim Truger, and Volker Wieland, (2022) “A potential sudden stop of energy imports from Russia: Effects on energy security and economic output in Germany and the EU,” German Council of Economic Experts working paper 01/2022.

 

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How the experts responded

Question 1

Participant Answer Confidence level Comment
Nicola Fuchs-Schündeln's picture Nicola Fuchs-Sc... Goethe University Frankfurt Between 3pp and 5pp Confident
I think the best estimate is around 3 pp. Of course, confidence bands are somewhat wide.
Eran Yashiv's picture Eran Yashiv Tel Aviv University and CfM (LSE) Between 5pp and 10pp Not confident
this is uncharted territory; the German chancellor seems to think the economists estimates of around 3% fall are far too optimistic; so it would be prudent to project a worse scenario
Ramon Marimon's picture Ramon Marimon European University institute and UPF-BarcelonaGSE Between 3pp and 5pp Not confident
Confidence is low not only because different studies rely on different aspects of the ban but also because how it is implemented -- in particular, the timing -- is crucial. An immediate abrupt EU-wide can easily be much more costly (than 5pp) but it is also less credible. However, as a drastic sanction to Russia what is important is to have a clear commitment to a path towards a full ban, as long Russian invasion prevails (i.e. not just war stops), with gradual measures that show it is not procrastinating but also finding the way to reach 'gas independence' from Russia. Costs then could be lower than 3pp. and financial markets will anticipate the costs for Russia (Asia and Africa are not easy substitutes for EU).
Maria Demertzis's picture Maria Demertzis Bruegel Between 5pp and 10pp Confident
Jumana Saleheen's picture Jumana Saleheen Vanguard Asset Management Between 3pp and 5pp Not confident
Germany is one of the largest importers of Russian gas. It imports 65% of its gas from Russia, compared to 40% for the EU. An immediate EU ban on Russian gas would therefore have a larger impact on German output on the EU. Germany is known to have a larger manufacturing sector than its EU counterparts. A shortage of gas supply is likely to lower manufacturing output and exacerbate an already disrupted global supply chain.
Volker Wieland's picture Volker Wieland Goethe University Frankfurt and IMFS Between 5pp and 10pp Confident
I would expect a reduction of 3 to 6 percent with upside risk. This comes at a time when German GDP is already roughly 2 percent below GDP of 2019 pre-corona crisis (Q2, Q1 1%). At the same time inflation has been rising a lot, and an embargo could push inflation near two-digit levels. Gas is pipeline dependent and alternative options (fracking, nuclear energy, lignite coal) are limited. As long as the political decision makers are not willing to use all possible meausures to reduce dependence on Russian energy imports, the effect of an embargo or a delivery stop on the side of Russia is likely to have substantial effects and cause a recession that may well compare to the one after the financial crisis.
John VanReenen's picture John VanReenen London School of Economics Between 3pp and 5pp Not confident
David Cobham's picture David Cobham Heriot Watt University Between 1pp and 3pp Not confident
must depend on accompanying policies
Ethan Ilzetzki's picture Ethan Ilzetzki London School of Economics Between 1pp and 3pp Confident
Richard Portes's picture Richard Portes London Business School and CEPR Between 3pp and 5pp Confident
Economists should put some faith in Baqaee et al., which is the best supported estimate we have. Can't take seriously the German BDI.
Martin Ellison's picture Martin Ellison University of Oxford Between 3pp and 5pp Confident
Camille Landais's picture Camille Landais London School of Economics Between 1pp and 3pp Confident
Jorge Braga de Macedo's picture Jorge Braga de ... Nova School of Business and Economics, Lisbon Between 3pp and 5pp Not confident
the lack of confidence stems from the unprecented nature of such an embargo and the assumption that all EU countries agree on the ban which seems unlikely especially in the absence of agreement on well-targeted fiscal policies
Wouter Den Haan's picture Wouter Den Haan London School of Economics Between 1pp and 3pp Extremely confident
Paul De Grauwe's picture Paul De Grauwe London School of Economics Don't know Not confident
Cédric Tille's picture Cédric Tille The Graduate Institute, Geneva Between 3pp and 5pp Not confident
Kate Barker's picture Kate Barker British Coal Staff Superannuation Scheme and University Superannuation Scheme Between 1pp and 3pp Not confident
Jean Imbs's picture Jean Imbs Paris School of Economics Between 1pp and 3pp Not confident at all
Philip Jung's picture Philip Jung University of Dortmund Between 3pp and 5pp Confident
The answer depends crucially on the rationing mechanism they will employ. If they do not allow prices for households to increase (and offer transfers based on past gas use) and if they ration industry by cutting gas proportional to last years use the cost will be substantial. If they use a sensible price mechanism, coupled with short time work and transfers, one can likely bound the cost below 5%.
Natalie Chen's picture Natalie Chen University of Warwick Between 1pp and 3pp Not confident
Robert Kollmann's picture Robert Kollmann Université Libre de Bruxelles Between 1pp and 3pp Not confident
Francesca Monti's picture Francesca Monti Kings College London Between 3pp and 5pp Confident
Benjamin Moll's picture Benjamin Moll London School of Economics Between 1pp and 3pp Confident
A GDP decline in the range from 1% to 3% is roughly what we argued for in our work on the question (Bachmann et al, 2022). In fact, the numbers coming out of the Baqaee-Farhi supply chain model are around 1% (see in particular the sufficient-statistics calculations here https://benjaminmoll.com/what_if_slides/). More pessimistic calculations using an aggregate production function yield a GDP loss of 2.2%. Because our models leave out a number of potentially important mechanisms, in particular standard Keynesian demand amplification mechanisms, we rounded this number up to 3% so as to leave ourselves a "safety margin." Subsequent work by Bayer, Kriwoluzky and Seyrich addressed exactly this criticism and found that the economic cost of an import stop still remains below 3% of yearly GDP. Other studies find numbers in roughly the same range, though some in the 3%-5% range. See https://benjaminmoll.com/RussianGas_literature/ for a review. The very well done "Gemeinschaftsdiagnose" finds a smaller number for the year 2022, namely -0.8%, and a larger number for the year 2023, namely -5.3%, so 3.05% on average across the two years. Of course, any model-based quantitative assessment of such a question is necessarily subject to considerable uncertainty which is why I selected "Confident" rather than "Very Confident" or "Extremely Confident".That being said, I am "Extremely Confident" that the GDP decline would not exceed 10% (which was one of the options from which to choose).
Lucio Sarno's picture Lucio Sarno Cambridge University Less than 1pp Confident
Roger Farmer's picture Roger Farmer University of Warwick Between 3pp and 5pp Not confident
Marcel Fratzscher's picture Marcel Fratzscher DIW Berlin and Humboldt University Berlin Between 3pp and 5pp Not confident
Fabrizio Coricelli's picture Fabrizio Coricelli University of Siena and Paris School of Economics Between 5pp and 10pp Confident
Alessandra Bonfiglioli's picture Alessandra Bonf... Queen Mary University of London Between 3pp and 5pp Confident
Costas Milas's picture Costas Milas University of Liverpool Between 1pp and 3pp Confident
Gino A. Gancia's picture Gino A. Gancia Queen Mary University of London Don't know Confident
Linda Yueh's picture Linda Yueh London Business School Don't know Not confident
Moritz Schularick Between 1pp and 3pp Confident

Question 2

Participant Answer Confidence level Comment
Nicola Fuchs-Schündeln's picture Nicola Fuchs-Sc... Goethe University Frankfurt Between 1pp and 3pp Confident
Eran Yashiv's picture Eran Yashiv Tel Aviv University and CfM (LSE) Between 3pp and 5pp Not confident
fiscal policy could compensate for some of the downfall
Ramon Marimon's picture Ramon Marimon European University institute and UPF-BarcelonaGSE Between 1pp and 3pp Not confident
Again, I think can be more important the timing of the ban than the 'well-targeted fiscal policies'. In particular, both elements are complementary. It is very difficult to reduce the cost to an immediate abrupt EU-wide import ban with fiscal policies than to reduce it when it is a well designed gradual path towards a full ban. "Well targeted transfer policies can reduce the social cost and support needed investments, but such policies take time to be properly implemented and are more effective when they are perceived as lasting policies as long as they are needed. In sum, I am very skeptical on 'well-targeted fiscal policies' to reduce the costs of an abrupt EU-wide import ban.
Jumana Saleheen's picture Jumana Saleheen Vanguard Asset Management Between 1pp and 3pp Confident
An EU ban on Russian energy is likely to lead to a recession in Germany. This could prompt a large fiscal package which could offset most, but not all of the fall in output.
Volker Wieland's picture Volker Wieland Goethe University Frankfurt and IMFS Between 5pp and 10pp Confident
Again I think a reduction of 3 to 6% will not be avoidable. Demand side policies cannot fix this. It's not a liquidity problem that needs to be maanged with loans from the ECB or the government. A major long-term re-organisation of industrial production is necessary and some companies will drop out and gas dependent sectors decline. This takes time. The main policy need is to use all alternative ways for energy supply (nuclear, fracking, lignite coal, LNG imports). If that is really done quickly Germany might get through an embargo or cessation of deliveries by Russia with a smaller recessionary effect. Large increases in debt monetized by the ECB would simply further raise inflation on top of the cost-push shock. This is quite different from the corona shock, which was disinflationary.
David Cobham's picture David Cobham Heriot Watt University Between 1pp and 3pp Not confident
Now nearer 1% than 3%.
Ethan Ilzetzki's picture Ethan Ilzetzki London School of Economics Between 1pp and 3pp Very confident
Richard Portes's picture Richard Portes London Business School and CEPR Between 3pp and 5pp Confident
Not much room for or likely effectiveness of fiscal policy in dealing with this supply shock.
Martin Ellison's picture Martin Ellison University of Oxford Between 1pp and 3pp Confident
Camille Landais's picture Camille Landais London School of Economics Between 1pp and 3pp Confident
Jorge Braga de Macedo's picture Jorge Braga de ... Nova School of Business and Economics, Lisbon Between 1pp and 3pp Not confident
the lack of confidence stems from the difficulty on defining well-targeted fiscal policies fast enough
Wouter Den Haan's picture Wouter Den Haan London School of Economics Between 1pp and 3pp Extremely confident
Paul De Grauwe's picture Paul De Grauwe London School of Economics Don't know Not confident
Cédric Tille's picture Cédric Tille The Graduate Institute, Geneva Between 3pp and 5pp Not confident
Jean Imbs's picture Jean Imbs Paris School of Economics Less than 1pp Not confident
Philip Jung's picture Philip Jung University of Dortmund Between 1pp and 3pp Confident
Natalie Chen's picture Natalie Chen University of Warwick Less than 1pp Not confident
Robert Kollmann's picture Robert Kollmann Université Libre de Bruxelles Between 1pp and 3pp Not confident
Benjamin Moll's picture Benjamin Moll London School of Economics Between 1pp and 3pp Confident
Similar reasoning as in response to the previous question. Well-targeted fiscal policy could arguably undo some of the Keynesian aggregate demand amplification discussed there. At the same time, this is still fundamentally a negative shock to aggregate supply so fiscal policy would not be able to *undo* the shock and reduce GDP losses below the 1% to 3% range. I would argue that GDP losses with well-targeted fiscal policy would likely lie somewhere in the 1% to 2.5% range.
Francesca Monti's picture Francesca Monti Kings College London Between 1pp and 3pp Confident
Lucio Sarno's picture Lucio Sarno Cambridge University Less than 1pp Confident
Roger Farmer's picture Roger Farmer University of Warwick Between 3pp and 5pp Not confident
Marcel Fratzscher's picture Marcel Fratzscher DIW Berlin and Humboldt University Berlin Between 3pp and 5pp Not confident
Fabrizio Coricelli's picture Fabrizio Coricelli University of Siena and Paris School of Economics Between 1pp and 3pp Confident
Alessandra Bonfiglioli's picture Alessandra Bonf... Queen Mary University of London Between 1pp and 3pp Confident
Costas Milas's picture Costas Milas University of Liverpool Less than 1pp Confident
Linda Yueh's picture Linda Yueh London Business School Don't know Not confident
Moritz Schularick Between 1pp and 3pp Confident

Question 3

Participant Answer Confidence level Comment
Nicola Fuchs-Schündeln's picture Nicola Fuchs-Sc... Goethe University Frankfurt Between 1pp and 3pp Confident
Ramon Marimon's picture Ramon Marimon European University institute and UPF-BarcelonaGSE Between 1pp and 3pp Not confident
The impact to the EU GDP growth will be lower than to Germany (I think there is consensus on this), but, as with Germany, the timing of the ban is crucial. In particular, since we are now referring to disruptions of Global Value Chains (predominant within the EU) which costs are substantially lower if the GVC have time to restructure.
Eran Yashiv's picture Eran Yashiv Tel Aviv University and CfM (LSE) Between 1pp and 3pp Not confident
there is wide variation in dependency across EU states so need to reduce forecast relative to Germany
Jumana Saleheen's picture Jumana Saleheen Vanguard Asset Management Between 1pp and 3pp Confident
I expect an immediate and full EU ban on Russian gas to reduce EU GDP by around 3pp. This would likely operate through two channels. First a further rise in commodity prices, which would push up on inflation and down on real income and demand. Second, the ban on energy would create a shortfall between gas demand and gas supply. To manage this the EU has said that it would set quotas on energy use in certain industries. This would reduce output.
John VanReenen's picture John VanReenen London School of Economics Between 1pp and 3pp Not confident at all
Volker Wieland's picture Volker Wieland Goethe University Frankfurt and IMFS Between 3pp and 5pp Confident
Most likely the effects will be much smaller for other countries such as France which relies on nuclear energy. Italy may well be similarly affected as Germany.
David Cobham's picture David Cobham Heriot Watt University Between 1pp and 3pp Not confident
There are of course other effects from the events in Ukraine...
Ethan Ilzetzki's picture Ethan Ilzetzki London School of Economics Between 1pp and 3pp Confident
Richard Portes's picture Richard Portes London Business School and CEPR Between 1pp and 3pp Confident
Martin Ellison's picture Martin Ellison University of Oxford Between 3pp and 5pp Confident
Camille Landais's picture Camille Landais London School of Economics Between 1pp and 3pp Confident
Jorge Braga de Macedo's picture Jorge Braga de ... Nova School of Business and Economics, Lisbon Between 1pp and 3pp Not confident
the lack of confidence stems from the additional difficulty on defining well-targeted fiscal policies in a timely fashion among so many different countries and energy mixes
Wouter Den Haan's picture Wouter Den Haan London School of Economics Less than 1pp Extremely confident
Cédric Tille's picture Cédric Tille The Graduate Institute, Geneva Between 1pp and 3pp Not confident
Harris Dellas's picture Harris Dellas University of Bern Between 1pp and 3pp Confident
Kate Barker's picture Kate Barker British Coal Staff Superannuation Scheme and University Superannuation Scheme Less than 1pp Not confident
Jean Imbs's picture Jean Imbs Paris School of Economics Between 1pp and 3pp Not confident at all
Philip Jung's picture Philip Jung University of Dortmund Between 1pp and 3pp Not confident
Natalie Chen's picture Natalie Chen University of Warwick Less than 1pp Not confident
Robert Kollmann's picture Robert Kollmann Université Libre de Bruxelles Between 1pp and 3pp Not confident
Benjamin Moll's picture Benjamin Moll London School of Economics Between 1pp and 3pp Not confident
Germany is more dependent on Russian gas than most other EU countries. This suggests that the GDP losses for the other countries should be bounded above by those for Germany. At the same time, I am less confident about this because I have not had the chance to look at the data (both on energy dependence and the sectoral makeup of the economy) and conduct detailed simulations with all the necessary due diligence for other EU countries in the way we did for Germany. In a report with David Baqaee, Camille Landais and Philippe Martin that we wrote for the French Council of Economic Advisors https://www.cae-eco.fr/staticfiles/pdf/cae-focus84.pdf, we did look at France in more detail, a country that is considerably less dependent on Russian gas than Germany. Our results are consistent with the intuition that the numbers for such countries are smaller than those for Germany. Given this, my very rough guess would be for EU-wide GDP losses from a gas import ban to be in the range between 0.5% and 2% of GDP.
Francesca Monti's picture Francesca Monti Kings College London Between 3pp and 5pp Not confident
Lucio Sarno's picture Lucio Sarno Cambridge University Less than 1pp Confident
Roger Farmer's picture Roger Farmer University of Warwick Between 3pp and 5pp Not confident
Marcel Fratzscher's picture Marcel Fratzscher DIW Berlin and Humboldt University Berlin Between 3pp and 5pp Not confident
Fabrizio Coricelli's picture Fabrizio Coricelli University of Siena and Paris School of Economics Between 3pp and 5pp Confident
Alessandra Bonfiglioli's picture Alessandra Bonf... Queen Mary University of London Between 1pp and 3pp Confident
Costas Milas's picture Costas Milas University of Liverpool Between 1pp and 3pp Confident
Linda Yueh's picture Linda Yueh London Business School Don't know Not confident
Moritz Schularick Between 1pp and 3pp Confident