Cutting Russia out of the global economy means higher prices, a slower recovery, and a whole new global power structure: 'We don't really have a playbook for how this might work'
Now that the conflict has exacerbated inflation, central banks could feel the pressure for more aggressive interest-rate increases. The conflicting forces could result in"subpar growth," JPMorgan's economists said. Only by cooling the economy to a less-than-ideal level, they argue, can the Fed and its peers get their hands around inflation.Severing the Russian economy — the 11th-largest in the world — from the financial system could shake up the global economic order.
There's simply no precedent for the economic dislocation Russia is experiencing, Brian Coulton, chief economist at Fitch Ratings, told Insider. Similarly severe sanctions have been levied on smaller economies like North Korea and Cuba, but never against such a global superpower. That leaves economists without much foresight as to how the sanctions will play out in the coming years.
"We don't really have a playbook for how this might work, trying to disconnect an economy of this scale," Coulton said, adding that the immediate effects will arise in the global energy supply. The Russia-Ukraine war"may fundamentally alter" the status quo in global trade, economists at the International Monetary Fund said in a recent
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