Office for National Statistics
Business Retreats and Sanctions Are Crippling the Russian Economy
Report

Business Retreats and Sanctions Are Crippling the Russian Economy

Jeffrey A. Sonnenfeld, Steven Tian, Franek Sokolowski, Michal Wyrebkowski and Mateusz Kasprowicz
SSRN, 2022
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On the heels of its attack on Ukraine, Russia is in rapid decline, according to this authoritative report from a team of international researchers and economists. Russia’s isolation in a globalized economy is only worsening the plight of its citizens, who lack many goods and services. These experts note that efforts to apply fiscal and monetary stimulus obscure what is increasingly a hollowed-out economy, and they warn that self-reliance in manufacturing without access to imports, capital markets and knowledge transfers spells further turmoil for the country.

Summary

Russia is disseminating a false narrative of its economic resilience to Western sanctions.

Inaccurate and highly curated releases of data from Russia cast its economy in a positive light. Officials disseminate this information to the media, constructing scenarios that depict a Russian economy more robust than it is.

As the war continues, much of Russia’s spin derives from flawed extrapolations of statistics from the early post-Ukraine invasion period, before sanctions could take their full bite. External observers, accustomed to accepting Russian government reports as credible, have spread the disinformation rather than fact-checking their sources.

The Russian economy is...

About the Authors

Professor Jeffrey A. Sonnenfeld, research director Steven Tian and graduate student Franek Sokolowski are with Yale School of Management. Michal Wyrebkowski is a student at the Wharton Business School at the University of Pennsylvania. Mateusz Kasprowicz is a student at the Warsaw School of Economics.

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