The Russian Inflation Premium

Introduction

On February 21st Putin announced that he was recognizing the independence of the enclaves Russia had created in the Donetsk and Luhansk regions of eastern Ukraine in 2014. Russia launched a large-scale invasion of Ukraine early on Thursday, initiating a war that will have sweeping consequences for Ukraine, Europe, and the international order. “The United States and its allies could find themselves deeply unprepared” to deal with the fallout, Liana Fix and Michael Kimmage write. “There may be little that the West can do to prevent a Russian military conquest,” but…