Title: Evaluating the effects of recent geopolitical events on German-Russian trade: a CGE framework approach

Authors: Nicholas Tsounis; Gerassimos Bertsatos

Addresses: Department of Economics, Laboratory of Applied Economics, University of Western Macedonia, Fourka Area, 52100 Kastoria, Greece; School of Social Studies, Hellenic Open University, George 4, Kaningos Square 106 77 Athens, Greece; Open University of Cyprus, 33, Yiannou Kranidioti Avenue, 2220 Latsia, Nicosia, Cyprus ' Department of Economics, Laboratory of Applied Economics, University of Western Macedonia, Fourka Area, 52100 Kastoria, Greece

Abstract: This study employs a multi-sector computable general equilibrium (CGE) model to investigate the German-Russian trade relationship, with an emphasis on the effects of sanctions on Russian imports following Ukraine's invasion. The input-output (I-O) table from 2015 is used in the study to quantify the impact of these restrictions and the changes in Germany's production that follow. Various counterfactual scenarios are explored, which includes quota of 67% and 35% on energy and rest of the Russian imports respectively, as well as 30% ad-valorem tariff. The simulation of this quota scenario on the baseline model shows significant reductions in output and domestic use levels. Additionally, the counterfactual analysis of the 30% ad-valorem import tariff on Russian imports indicates a 1.7% overall price increase and a roughly 3.8% decrease in household welfare due to the sanctions.

Keywords: German-Russian relationship; CGE model; input-output table; substitution elasticity estimation; constant elasticity of substitution; CES.

DOI: 10.1504/IJCEE.2026.151001

International Journal of Computational Economics and Econometrics, 2026 Vol.16 No.1/2, pp.55 - 91

Received: 04 Jul 2024
Accepted: 09 Oct 2024
Published online: 08 Jan 2026 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article