Explain the effect of different sanctions (be specific) to the Russian economy.
Economic implications of sanctions
1) Explain the effect of different sanctions (be specific) to the Russian economy. (400 words)
- Effect of blocking the central bank reserves (use data on reserves composition to develop your argument)
- Effect of cutting some banks from the swift system
Focus on the macroeconomic effect: inflation, output, exchange rate, trade). Use relevant diagrams where required.
2) Explain to what extent these measures are effective (distinguish between a and b). (400 words)
3) Explain what the central bank of Russia can do in response to a devaluation of the rouble and the economic effect of the counter-measures. (400 words)
4) Assess the effect of sanctions on the EU economy in particular and the world economy in general. Try to give a qualitative answer focusing on inflation and output. (400 words)
5) Assume that the rest of the world decides to impose sanctions on the US by blocking the reserves of the Fedearl Reserve. To what extent that would be successful? (400 words)
[in all answers, distinguish between the immediate effect and the effect that they will have in the next few years if there is no peace agreement]
Debt sustainability
Consider two countries: Japan and Italy.
- Collect data on growth, inflation, interest rate at the relevant maturity. Evaluate public debt sustainability using the basic equation. (400 words)
- Discuss factors that may improve or worsen the debt sustainability evaluation. Consider possible evolution of interest rates including risk premia, debt maturity, inflation and growth. Consider also the role of the central bank in the two countries (350 words)
