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Vladimir Putin’s Olympic Games have come with a price tag estimated to be nearly $50 billion. Some of this was spent on building new sports venues and arenas but most of it on Russia’s infrastructure, upgrading roads, airports and train stations.

A report by the European Bank for Reconstruction and Development suggests that this Olympics will not boost Russia’s economy as a whole. All the spending and the influx of visitors is just a short term blip. The city of Sochi and the Krasnodar region may see longer term growth thanks to the two and a half week tourism commercial the world has been watching but not the rest of the country.

I can’t imagine that a shot to the arm like the Olympics has no impact economically. The money spent on construction alone has to have some velocity through the system.  Maybe because Russia’s unemployment is so low already it really doesn’t matter.

Even so, every time the IOC looks for applicants to host the games it’s inundated with requests. Cities are chomping at the bit to spend billions and put their nation on display for the world to see, even if it’s only for a couple weeks. Perhaps it’s more for vanity than anything else.

Do the Olympics have long term economic benefits for the host nation?

Do the Olympics have more of an impact on developed or emerging market countries?

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