Work detail

The economic costs of conflict: A case study of the Russo-Ukrainian War

Author: Mgr. Júlia Hamráková
Year: 2022 - summer
Leaders: PhDr. Jaromír Baxa Ph.D.
Consultants:
Work type: Finance, Financial Markets and Banking
Masters
Language: English
Pages: 94
Awards and prizes:
Link: https://dspace.cuni.cz/handle/20.500.11956/173999
Abstract: Since 2014, an armed conflict between pro-Russian separatists and the Ukrainian
army in Donbas has been causing damage to the society, infrastructure, and economics of Ukraine. This thesis deals with the conflict in eastern Ukraine and
focuses on its economic impact in the period from 2014 to 2020. Using the synthetic control method and the augmented synthetic control method, on a country
level we evaluate the economic cost of the conflict in terms of the GDP per capita
of Ukraine and Russia. On the regional level, we estimate the impact of the conflict on the GRP per capita of the Luhansk and Donetsk regions. Moreover, we
look for evidence of spillover effect on neighbouring Dnipropetrovsk region and
Kharkiv region in Ukraine and Krasnodar Krai, Belgorod Oblast, and Rostov
Oblast in the Russian Federation. While the results indicate a significant gap in
GDP per capita of Ukraine attributable to the war, the negative economic effect
on the GDP per capita of the Russian Federation after accounting for the price
drop of crude oil in 2014 and 2015 is only minor and too insignificant to interpret
it with confidence. The findings further suggest a destroying effect of the conflict
on GRP per capita of both Luhansk and Donetsk regions. The spillover effect
of the war on neighbouring regional economies in both countries is in most cases
negative, but statistically insignificant.
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