Russia’s invasion of Ukraine: assessment of the humanitarian, economic, and financial impact in the short and medium term

What are the economic effects of the Ukraine war for Ukraine, Russia, and the rest of Europe? In this study, the Vienna Institute for International Economic Studies (wiiw) sheds light on the immediate consequences on the one hand, but also on the medium-term structural changes caused by the largest armed conflict in Europe since the Second World War. The Russian invasion of Ukraine has triggered a humanitarian crisis. Pre-war, almost 19 m people lived in those regions that are currently directly affected. Refugee inflows to the rest of Europe are likely to be at least three times greater than in 2015/2016. As Black Sea ports come under Russian assault, Ukraine has lost its ability to sell more than half of its exports, primarily agricultural commodities and metals. Western financial support will become ever more important as the war continues. Turning to Russia, sanctions will have a very serious impact on that country’s economy and financial sector. Despite being partly hamstrung by the fact that a large proportion of Russian reserve assets are frozen in the EU and G7, the central bank managed to stabilise financial markets by a combination of confidence-building and hard-steering measures: capital controls, FX controls, regulatory easing for financial institutions, and a doubling of the key policy rate. The medium-term and long-term outlook is negative. As a result of the war and the sanctions, the rest of Europe faces a surge in already high inflation; this will weigh on real incomes and will depress economic growth. Many European countries rely heavily on Russia for oil and gas imports: import shares are over 75% in Czechia, Latvia, Hungary, Slovakia, and Bulgaria with respect to natural gas; Slovakia, Lithuania, Poland, and Finland with respect to oil and petroleum; and Cyprus, Estonia, Latvia, Denmark, Lithuania, Greece, and Bulgaria with respect to solid fuels. Aside from energy, the fallout via trade for the rest of Europe is likely to be small. Non-energy trade and investment links between Russia and many European countries have declined in importance since 2013. There are four main areas of structural change and lasting impact for the EU (and Europe more broadly) as a result of Russia’s invasion of Ukraine. First, the EU will get more serious about defence. Second, the green transition will gather pace. Third, broader Eurasian economic integration will be unwound. And fourth, the EU accession prospects for countries in Southeast Europe could (and should) improve.

Mapping the local viscosity of non-Newtonian fluids flowing through disordered porous structures

Flow of non-Newtonian fluids through topologically complex structures is ubiquitous in most biological, industrial and environmental settings. The interplay between local hydrodynamics and the fluid’s constitutive law determines the distribution of flow paths. Consequently the spatial heterogeneity of the viscous resistance controls mass and solute transport from the micron to the meter scale. Examples range from oil recovery and groundwater engineering to drug delivery, filters and catalysts. Here we present a new methodology to map the spatial variation of the local viscosity of a non-Newtonian fluid flowing through a complex pore geometry. We use high resolution image velocimetry to determine local shear rates. Knowing the local shear rate in combination with a separate measurement of the fluid’s constitutive law allows to quantitatively map the local viscosity at the pore scale. Our experimental results—which closely match with three-dimensional numerical simulations—demonstrate that the exponential decay of the longitudinal velocity distributions, previously observed for Newtonian fluids, is a function of the spatial heterogeneity of the local viscosity. This work sheds light on the relationship between hydraulic properties and the viscosity at the pore scale, which is of fundamental importance for predicting transport properties, mixing, and chemical reactions in many porous systems.

Pore-Scale Hydrodynamics in a Progressively Bioclogged Three-Dimensional Porous Medium: 3-D Particle Tracking Experiments and Stochastic Transport Modeling

Biofilms are ubiquitous bacterial communities that grow in various porous media including soils, trickling, and sand filters. In these environments, they play a central role in services ranging from degradation of pollutants to water purification. Biofilms dynamically change the pore structure of the medium through selective clogging of pores, a process known as bioclogging. This affects how solutes are transported and spread through the porous matrix, but the temporal changes to transport behavior during bioclogging are not well understood. To address this uncertainty, we experimentally study the hydrodynamic changes of a transparent 3-D porous medium as it experiences progressive bioclogging. Statistical analyses of the system's hydrodynamics at four time points of bioclogging (0, 24, 36, and 48 h in the exponential growth phase) reveal exponential increases in both average and variance of the flow velocity, as well as its correlation length. Measurements for spreading, as mean-squared displacements, are found to be non-Fickian and more intensely superdiffusive with progressive bioclogging, indicating the formation of preferential flow pathways and stagnation zones. A gamma distribution describes well the Lagrangian velocity distributions and provides parameters that quantify changes to the flow, which evolves from a parallel pore arrangement under unclogged conditions, toward a more serial arrangement with increasing clogging. Exponentially evolving hydrodynamic metrics agree with an exponential bacterial growth phase and are used to parameterize a correlated continuous time random walk model with a stochastic velocity relaxation. The model accurately reproduces transport observations and can be used to resolve transport behavior at intermediate time points within the exponential growth phase considered.

Intermittent Lagrangian velocities and accelerations in three-dimensional porous medium flow

Intermittency of Lagrangian velocity and acceleration is a key to understanding transport in complex systems ranging from fluid turbulence to flow in porous media. High-resolution optical particle tracking in a three-dimensional (3D) porous medium provides detailed 3D information on Lagrangian velocities and accelerations. We find sharp transitions close to pore throats, and low flow variability in the pore bodies, which gives rise to stretched exponential Lagrangian velocity and acceleration distributions characterized by a sharp peak at low velocity, superlinear evolution of particle dispersion, and double-peak behavior in the propagators. The velocity distribution is quantified in terms of pore geometry and flow connectivity, which forms the basis for a continuous-time random-walk model that sheds light on the observed Lagrangian flow and transport behaviors.

Laminar superlayer at the turbulence boundary

In this Letter we present results from particle tracking velocimetry and direct numerical simulation that are congruent with the existence of a laminar superlayer, as proposed in the pioneering work of Corrsin and Kistler (NACA, Technical Report No. 1244, 1955). We find that the local superlayer velocity is dominated by a viscous component and its magnitude is comparable to the characteristic velocity of the smallest scales of motion. This slow viscous process involves a large surface area so that the global rate of turbulence spreading is set by the largest scales of motion. These findings are important for a better understanding of mixing of mass and momentum in a variety of flows where thin layers of shear exist. Examples are boundary layers, clouds, planetary atmospheres, and oceans.

Economic Inequality in Central, East and Southeast Europe

The article analyses the issue of economic inequality in the transition economies of Central, East and Southeast Europe. It consists of a literature review and a descriptive analysis as well as an econometric modelling exercise. In the first part we point at the fact that the rise in income inequality was triggered by the magnitude of transitional output loss and a reduction of formal employment. Rising wage inequality was at the core of total income dispersion, while government transfers had a redistributional function only in Central and Southeast European countries contrary to the Commonwealth of Independent States (CIS). In the econometric analysis it is found that for instance public utilities infrastructure liberalisation has increased inequality in transition, while price and trade liberalisation has decreased it. A high share of employment in industry and high government expenditures are connected with less inequality.

GSIM Measurement of the Effects of the EU accession of the Balkans and Turkey on Agricultural Trade

In this paper, the global simulation model (GSIM) for the analysis of global, regional, and unilateral trade policy changes by Francois and Hall (2003) was applied to the agricultural trade between the EU, the Balkans and Turkey. This was done in order to measure the effects of an EU accession of the Balkans and Turkey. Most of the changes in welfare after a full liberalisation of agricultural trade between the Balkans and Turkey on the one hand and the EU on the other hand can be expected in the accession countries themselves. It is estimated that incumbent EU members will be affected only to a minor extent. It was also estimated that the exchange rate risk is not very high.