TY  - RPRT
        AU  - Gorodnichenko, Yuriy
AU  - Vasudevan, Vittal
        TI  - Macroeconomic Expectations in a War
        PY  - 2025/Jul/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 18017
        UR  - https://www.iza.org/publications/dp18017
        AB  - Using a short- and long-term macroeconomic forecasts, we estimate the cost of the Russian full-scale invasion of Ukraine for countries in Eastern Europe, Caucasus, and Central Asia. Shortly after the Russian attack, the projected cost (cumulative over six years) stood at $2.44 trillion for the region. Professional forecasters predicted a dramatic increase in macroeconomic uncertainty, significant spillover effects, some hysteresis effects as well as a changing nature of business cycles. We also use the war shock to study how professional forecasters acquire and process information. Our results point to state dependence as well as an important role of forward information in shaping macroeconomic outlook of professional forecasters.
        KW  - defense
KW  - event analysis
KW  - geoeconomics
KW  - Ukraine
KW  - forecasting
KW  - conflict
KW  - military
KW  - uncertainty
        ER  -