WORKING PAPER - At What Cost? The Economic and Human Costs

The short-term economic costs of the invasion include not only the direct war damage in Ukraine and the immediate consequences of the economic sanctions and counter-sanctions on current economic output in the economies of the combatants, but also the induced negative impacts for global growth, inflation, and commodity supply disruptions, most importantly of food and energy. [...] The • the toll of dead and wounded, which has “sudden repricing of risks” can safely be attributed mounted steadily as Russia’s military strategy to the war; the marginal differences between the shifted to a Grozny-like war of mass destruction two outlooks is thus a reasonable estimate of the and attrition of forces in the war zone; impact of the war on global growth at that point. [...] share of GDP over the business cycle, then a A first question is whether this is plausible as an reduction in trend growth as assumed above would estimate of the structural reduction in the value of imply a reduced present value of future profit flow Russian equities? of about the amount of the instantaneous fall in the A significant write-down in the value of market capitalization of the MOEX fol. [...] But the trauma was The decline in life expectancy in Russia felt almost immediately by virtually the entire following the collapse of the Soviet Union is population as the news, the comments, and the testimony that this is far from an exaggeration of screenshots circulated on various social media the impacts of the war on Ukraine. [...] For the life-shortening effects of stress/PTSD, I use the last 3 years of the life span, reduced by the ratio of 2.8/3.0 to calculate As can be seen, the average of the Robinson et the impacts.