The ordinary consumer: the burden of economic sanctions against Russia

Nureev Rustem, M.
Honored Worker of Higher School of the Russian Federation, Doctor of Economics (DSc), Head of the Department of Economic Theory, Ordinary Professor , Financial University under the Government of the Russian Federation, National Research University - Higher School of Economics, Moscow

Petrakov Pavel, K.
Post-Graduate Student, National Research University - Higher School of Economics, Moscow

Journal of Economic Regulation, 2015, Vol. 6 (no. 3),

p. 40-60
DOI: 10.17835/2078-5429.2015.6.3.040-060

The main thrust of the paper - an attempt to assess how much the sanctions combined with the drop in oil prices hit the consumers. This paper provides an overview of the sanctions imposed by European Union, the United States and other countries (ban largest organizations in Russia to attract foreign capital of the European Union and the United States). The burden of economic sanctions against Russia for the average consumer is shown on the change in prices for food products, electronic products, analyzed Russian car market, the dynamics of small and medium-sized businesses in Russia. The results of import substitution - the balances of trade of consumer goods in Q1 2015 compared to Q1 2014. Dynamics of demand for electronic goods in the paper discusses the example of the effect of price changes in the popular Russian companies (Apple, Sony, etc.) to sales. Rising prices for electronic goods has led Apple to a Giffen’s paradox in late 2014, the higher the price - the more sales. Despite the rapid rise in prices for the company's products (price of products apple Nov. 25 rose by 25% on December 22 for another 35%), sales growth was 80%. This is due to the fact that Russian consumers feared further rise in price of goods and the goods were afraid to lose, which has become for many of them a necessity. Car loans in Q1 2015 compared to Q1 2014 decreased by 4 times, car sales fell by 2 times, import cars from abroad fell almost 2-fold. Especially hard hit small businesses. If in 2013 in Russia was opened 490.7 thous. legal entities, and closed 419 thousand. Then for 11 months in 2014 opened 417.5 ths. legal entities and closed down 483.6 thousand. This means that if in 2013 opening of 70 thousand legal persons more, in 2014 almost 70 thousand legal persons shut more than open. Statistics show that the number of people wishing to sell his business in 2014 increased significantly. In Moscow, for example, in 2014, it was filed with the 14.5 times the advertisement for the sale of business than in 2013, in the Moscow region - 11.7 times, in St. Petersburg - 15.8 times, in Krasnodar Territory - 11.1 times (according to www.rbc.ru). The economic crisis has hit the tourism. The cost of trips abroad increased by 50% or more. Changed the main streams - greatly increased domestic tourism in general, and in the south of Russia in particular. The paper analyzes the changes in the overall macroeconomic performance of Russia in 2014-2015, illustrated by changes in the ADAS model. The paper discusses two nearest forecast scenario from the perspective of the average consumer: optimistic (reduced volume and intensity of sanctions) and pessimistic (strengthening of sanctions, including a work stoppage of Visa and MasterCard in the Russian Federation, the Russian banking system off from SWIFT, etc.).

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Keywords: consumer behavior; economic crisis; economic sanctions; Russia; the paradox of Giffen; consumer basket.

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Publisher: Ltd. "Humanitarian perspectives"
Founder: Ltd. "Humanitarian perspectives"
Online ISSN: 2412-6047
ISSN: 2078-5429