UDC 338.1

DOI: http://doi.org/10.15350/2409-7616.2024.1.20

Skryl T.V.¹ (Moscow, Russian Federation) – skryl.tv@rea.ru

¹Plekhanov Russian University of Economics

Abstract. To occupy a leading position in the global economy means to have more opportunities for the development of your country, as well as to influence the economies of other countries by dictating or imposing your own conditions. Economic sanctions reduce trade turnover, worsening possible future relations between countries, and, in general, have a strong impact on gross domestic product (hereinafter GDP) and not only. Economic sanctions are just the tool when a dominant country forces another country to choose the imposed conditions for running its economy. But today practice shows that not only the country they are aimed at suffers from economic sanctions, but also the country that initiated the sanctions, as well as the countries that supported them. The “butterfly effect” from the imposition of sanctions, as a manual regulatory mechanism, is obtained due to the dense interconnections of trade and financial flows today. Even if the sanctions restriction has hit the target, the consequences of it affect more and more economies to varying degrees, like spreading circles on the water. The article evaluates the impact of the two stages of the imposition of sanctions on the Russian economy, highlights the consequences for both the Russian economy and foreign countries. In conclusion, the author draws conclusions that any economy works better if it is not under pressure and does not promptly implement costly anti-crisis management measures, which always force you to sacrifice something. The economics of sanctions consist of the fact that the expenses of the target country, or rather its lost income, become the income of the initiator country or its satellites.

Keywords: sanctions, butterfly effect, regulation, manual mechanism, market, commodity flows, network economy, economic development.

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For citation: Skryl T.V.  The economics of sanctions: the “butterfly effect” of the use of manual regulatory mechanisms. CITISE, 2024, no. 1, pp. 236-249. DOI: http://doi.org/10.15350/2409-7616.2024.1.20