When the G7 capped Russian oil at $60 in 2022, many expected production cuts and a global price spike. We spoke with Lukasz Rachel of @ucl.ac.uk and Catherine Wolfram of @mit.edu about why this textbook intuition on price caps fails in Russia’s case. www.aeaweb.org/research/pri...
The economics of sanctioning a petrostate
Lukasz Rachel and Catherine Wolfram discuss the G7 price cap on Russian oil and why it defied textbook predictions.
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