CEU eTD Collection (2025); Bilko, Artem: Harvesting the Blast Craters Ukraine's Post-War Recovery Potential through Synthetic Control and Input???Output Modeling

CEU Electronic Theses and Dissertations, 2025
Author Bilko, Artem
Title Harvesting the Blast Craters Ukraine's Post-War Recovery Potential through Synthetic Control and Input???Output Modeling
Summary This thesis develops an empirical framework to assess the economic cost of war for Ukraine and guide post-conflict recovery planning through a combined Synthetic Control Method (SCM) and Input–Output (IO) model. Using macroeconomic data from 1996 to 2023, a counterfactual “synthetic Ukraine” is constructed from a donor pool of 18 regional peers to estimate the trajectory Ukraine’s economy would potentially have followed in the absence of war. By 2021, the analysis shows that Ukraine’s GDP per capita (PPP) was approximately $1,007 below its synthetic equivalent, implying a one-year output loss of $44.6 billion, equivalent to ₴325.6 billion in lost GDP, and a cumulative loss of $1.1 trillion over the decade-long conflict.
The SCM estimate is then converted and used as a target output for IO-based reconstruction modeling. Instead of injecting fixed sectoral stimuli, the model reverses the Leontief model to determine the sector-specific final demand required to close the output gap between real and synthetic Ukraine. Recovery scenarios simulated across Ukraine’s 42-sector IO structure include infrastructure-led, industrial, agricultural, and balanced pathways. Required injections of final demand range from ₴708 billion (balanced) to over ₴1.1 trillion (industrial), with total output requirements ranging from ₴1.09 trillion to exceeding ₴1.8 trillion.
The findings highlight that no recovery strategy is universally “optimal.” The effectiveness of reconstruction depends not only on sectoral multipliers but also on realistic supply conditions, such as available labor, capital, and institutional capacity, factors that are out of the scope of this thesis. Nevertheless, the SCM-IO framework offers a transparent and adaptable tool for scenario-based recovery planning once updated post-war data becomes available, supporting both strategic vision and implementation in Ukraine’s short-term reconstruction.
Supervisor Romhányi, Balázs
Department Economics MA
Full texthttps://www.etd.ceu.edu/2025/bilko_artem.pdf

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