US, EU division on Russia sanctions nothing new

It’s impossible to predict how the crisis in Ukraine will progress, but the rupture in relations between Russia and the West is unlikely to heal any time soon.

At the very least, trade between these two sides is going to be badly affected for a long time. To get a sense of how the global economy might function in the coming months and years, it makes sense to look at what happened during the cold war.

It’s difficult to make exact comparisons, but the relative economic power of the two sides was very different in that era. In 1979, just before the start of the Soviet-Afghan war, the Soviet Union accounted for 9% of world GDP. In contrast, Western Europe, the US, Canada, Australia and New Zealand accounted for about half.

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