Market comment 2022

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Sanctions have been effective at crippling the Russian economy. That's the conclusion of a new 118-page paper from Yale's Jeffrey Sonnenfeld and 18 co-authors.

Why it matters: The big question about Russia sanctions is whether they have teeth, if they exclude Russian oil and gas. While official Russian statistics suggest the economy is using its oil and gas revenues to withstand the effects of sanctions, Sonnenfeld's paper says that the official Russian statistics are lies.

What they found: The paper's results include sobering facts about the Russian economy.

• "Russian imports have largely collapsed," the paper says — creating massive supply shortages and denying the country crucial parts and technologies.
  
• "Russian domestic production has come to a complete standstill."
  
• Foreign companies that have left Russia account for 40% of Russian GDP, the author wrote, almost none of which is going to come back any time soon.
  

The conclusion: "Looking ahead, there is no path out of economic oblivion for Russia as long as the allied countries remain unified in maintaining and increasing sanctions pressure."

Russian economy bitten by sanctions