Economic impact of Russia's full-scale invasion of Ukraine on its regional economies

This paper examines the economic impact of Russia's full-scale invasion of Ukraine on its regional economies. Our analysis focuses on the regional disparities and convergence trends within Russia, driven by increased military spending and structural changes. We document how regions with a strong military-industrial presence have experienced substantial income growth, while others, particularly those with less industrial activity, have lagged. The paper also explores the long-term implications of excessive reliance on military spending for regional development and economic efficiency. Our findings suggest that while there has been some convergence in regional incomes during the war, particularly with medium-sized industrial towns catching up to the historically better off regions, the sustainability of this trend remains uncertain due to the misallocation of resources and the broader economic challenges facing Russia.