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On Friday, February 2, Yuriy Gorodnichenko joined Markus’ Academy for a lecture on The Ukrainian War Economy. Gorodnichenko is the inaugural Quantedge Presidential Chair in Economics at UC Berkeley.

Watch the full presentation below. You can also watch all Markus’ Academy webinars on the Markus’ Academy YouTube channel.


[0:00] Markus’ introduction and poll questions
[7:06] The size of the shock
[16:39] Reduced productive capacity
[30:30] External imbalances
[34:37] Fiscal challenges
[44:15] Financial stability
[50:32] Extreme uncertainty
[1:02:35] Ending on a positive note


  • A summary in five bullets
    • A day of war costs Ukraine ~$1-1.5bn in damages. After more than 700 days, this amounts to ~$1tr in losses.
    • Ukraine has largely responded to the reallocation shock through markets. Many industries like agriculture and IT have proved resilient, while Ukraine has been creative at protecting its grain exports.
    • None of the economic aid is used for military spending. Up to now it has helped to stabilize the economy, especially through monetary policy. However the amounts and timing of aid are highly unpredictable, creating an unnecessary uncertainty.
    • Aid is not just an act of charity, it is an investment in security. We need to think about the costs of no-security. The invasion will lead to a test of NATO’s article V.
    • The economy faces 5 key challenges: (1) Reduced productive capacity, (2) External imbalances, (3) Fiscal imbalances, (4) Financial stability, and (5) Extreme uncertainty.
  • Click here to download the full summary