This simulation analyzes how sanctions impacted war outcomes in Russia and Ukraine, suggesting potential deterrence effects.
Our paper simulates a model of trade, diplomacy, and wars, calibrated to be relevant for analyzing the conflict between Russia and Ukraine. The quantitative results show that Ukraine’s decoupling from Russia after the 2014 annexation of Crimea reduced its economic exposure to war but also increased the likelihood of conflict by lowering its opportunity cost of war. We then simulate sanction scenarios and find that the 2024 package, if credibly announced in 2021 and made contingent on further aggression, would have significantly raised Russia’s cost of war and could have deterred the 2022 invasion.
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Mayer et al. (2026) studied this question.
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