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What will a possible Russian invasion of Ukraine do to the US Economy?

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DENVER (KDVR) — As tension mounts at the border of Russia and Ukraine, uncertainty looms as well. 

No one is sure if an invasion will happen, but there’s concern on US soil that it may impact the economy. 

Metro State University of Denver Distinguished Professor of Economics Kishore G. Kulkarni, Ph.D., said right now there is no certainty of war and there is no need to panic, but he does add that all the progress we made toward a pandemic recovery will be stalled if war does break out.   


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“We should not panic. I think there is no reason for the U.S. consumers to panic because this is not a real shock to the economy as yet,” said Kulkarni.  “We really don’t know what they are thinking, and it’s very hard to judge that for, say, Russia or China where the information flow is not really that open.” 

Kulkarni said usually diplomacy prevails. 

“If [Putin] doesn’t understand diplomacy, if he understands only arms fight then he doesn’t stand a chance because really speaking, either way, he has to back down because economically, Russia right now is not doing very good,” Kulkarni said.  

Because Russia is a huge provider of oil for many countries in Europe and the west, it’s not only gas prices that will strain the US consumers’ wallets.  

“Gas is a very big thing for U.S. economy because gas is an ingredient for almost everything that we consume. We need gas even for our grocery items because they have to be transported and therefore for U.S. economy gas is a very important ingredient,” Kulkarni said.   

How long the conflict lasts also plays a role in the length of recovery.  


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“If [war] doesn’t last more than a week, then recovery will be very fast in probably a few months or so. In fact, it could be like it didn’t even happen. If the war actually gets worse and stays there for several weeks, then especially the gasoline production in the world will be affected and the prices will go up. An increase in gasoline prices can be a very bad thing for the U.S. economy,” said Kulkarni.  

All of that said, Kulkarni hopes common sense prevails and peacetime returns.  

Many also predicted that Putin would hold off until the end of the Olympics because the games are typically a sign of peace. However, Professor Kulkarni said that the military officials aren’t looking at a calendar and aren’t working around the Olympic games, meaning the unpredictability continues.  

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