Russia’s Wartime economy explained \ stacker news ~econ

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Russia’s Wartime economy explained youtu.be/o68zNn2s_Rg?si=jLmK-8vRtAthTMM7

709 sats \ 9 comments \ @BlokchainB 6h econ

YouTube economist Patrick Boyle breaks down the Russian economy. This is a good video explaining how the Russian economy experienced growth during wartime.

Things that I learned.

GDP is a ghost metric. When the Russian economy makes a tank it gets counted in their GDP but once it gets destroyed in war it wasn’t productive. It’s no different than printing up cash and just giving it to the company for nothing in return.
Since Russia was cut off from Westen products they had to find replacements from China and India which are of less quality. Russians lose because they are paying more for substandard products.
To control inflation Russian central bank raises interest rates to 21%! But they gave breaks to Russian home buyers.
To avoid mass conscription the Russian government increased the pay to soldiers and factory workers. While unemployment is low it’s mostly all contributed to payments to soldiers and the families of dead soldiers.
Russia being rich in natural resources (oil) gives them the Dutch Dilemma where a country fails to invest and innovate in other sectors of the economy due to the ease it is to pull oil out the ground and sell it. Thus the economy can stagnate
When the war ends Russia will have a tough path to a functioning economy. Unlike Ukraine Russia isn’t experiencing mass infrastructure destruction plus a brain drain of Russians can occur where they can garner higher wages in the world economy once they are back.

Overall this war can set Russia back decades. After reading this now I understand why NATO and the west was supporting the war so hard. If this video is remotely accurate Russia is setting its population back years and the quality of life will go down.

War is hell. Even the winner loses.

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561 sats \ 4 replies \ @stack_harder 4h

as a Russia watcher and haver of a Russian wife I would say this sums it up pretty well.

There's all kinds of crazy stuff going on with women trying to marry enlisted men so they get the death payout and widow discounts and more dystopian stuff.

Putin has royally fucked the Russian economy for at least a decade , that being said, if you live in Moscow or Saint Petes, you won't notice much.

when this eventually ends and you have soldiers coming back en masse, the inflation will be huge(it's already quite high on a lot of things) as that money starts hitting the market.

156 sats \ 2 replies \ @Undisciplined 4h

Are more women taking paid jobs during the war (as opposed to working in the home)?

That was one of the ways GDP numbers got really out of whack during WWII. It wasn't that women were doing a lot more work, they were just switching to the kind of work that counts towards GDP and the really sick part is that the jobs they switched into were probably less productive than what they had been doing.

245 sats \ 1 reply \ @stack_harder 3h

I don't think it's affecting the number of women in the workforce much, most Russians are dual-income households these days like in the West. But they have the GDP work issue too yes, people are flocking to more to military/war adjacent jobs because that's where the money is.

So you can make some silly money sewing camouflage nets, putting drones together etc but non-war industries or jobs can't afford those high wages, and they're (naturally) complaining about the central bank killing them with the high rates.

The head of the central bank refuses to budge because she doesn't want inflation going crazy.

Russian banks are also paying super-high interest rates on deposits too , upwards of 15% sometimes which is also changing incentives since people think why invest or do anything when I can just park this money in the bank 'risk-free' and get 15% for doing nothing.

There are all kinds of weird market distortions going on.

32 sats \ 0 replies \ @Undisciplined 3h

Thanks

0 sats \ 0 replies \ @BlokchainB OP 4h

Thanks for this feedback. Sad to read

162 sats \ 0 replies \ @kepford 1h

War is hell. Even the winner loses.

This is the lesson that is so hard to learn. Apparently

210 sats \ 0 replies \ @Undisciplined 4h

Thanks Blok!

I don't think enough attention has been paid to this. War economies are ludicrously mismeasured by GDP (probably a sign that GDP is dumb).

55 sats \ 0 replies \ @IamSINGLE 3h

they had to find replacements from China and India which are of less quality.

Indian products aren't as bad as Chinese, not all products.

297 sats \ 0 replies \ @SwapMarket 5h

And the saddest part, the Russians who understood this were either exiled, jailed or killed, and those remaining are so brain dead they obey and endure. Negative selection all over again.