Crimea yesterday voted to rejoin Russia and the West vowed to retaliate by initially imposing sanctions on a select group of Russian officials, assets and bank accounts. It’s anyone’s guess what the second phase of sanctions might look like. No matter the details, the US and Europe can’t reverse what appears to be an overwhelmingly strong desire by Crimeans to break free of Ukraine. Russia, having sent troops into the region and publicly stated its intentions in no uncertain terms, is unlikely to change course. Welcome to the biggest geopolitical stalemate of the 21st century to date.

The question is where we go from here and what it means for the global economy. A quick resolution certainly looks unlikely. Russia, after all, has key strategic assets at stake in Crimea, starting with its Black Sea fleet, which has had a presence on the peninsula since the 18th century. Meantime, ethnic Russians dominate the population in Crimea—a population that has never been comfortable with living as a region under Ukraine’s rule.

“Putin is just defending his country’s interests,” says a manager at a Moscow-based trader of consumer products. “Crimea is historically important for Russia and it’s Russian.”

Europe and Ukraine will likely suffer the most from any economic fallout, which Russia is positioned to impose if it chooses. Around 30% of Europe’s natural gas supply comes from Russia; Ukraine relies on Russia for more than half of its gas. Within Europe, the reliance on Russian gas varies widely. France, for instance, draws only 15% from Russia, but the Baltic states are close to totally dependent on its neighbor to the east.

In any case, President Putin has the means to squeeze Europe and the Ukraine. He also has the will. In 2009, Russia shut off gas supplies to Ukraine for two weeks. Would he do so again? For Europe as well? And for a longer stretch? If Europe suffers, what does that mean for the US economy? Blowback for China can’t be dismissed either. Trade between the EU and China has grown substantially in recent years and so the world’s second-largest economy will likely be dragged into the crisis if it turns into a protracted struggle.

Much depends on how the West reacts. “The market to some extent expects sanctions now. It depends on what kind of sanctions and (Russia’s) reaction to the sanctions to see if we can talk of a de-escalation of the crisis or not,” Piet Lammens, a KBC strategist in Brussels, tells Reuters.

At this stage, there’s mostly uncertainty. With multiple factors of strategic significance in play at the moment, Tyler Cowen recommends looking ahead through the lens of game theory.

A Russian occupation of Crimea raises the specter of the Cold War, in which the nuclear stalemate between the United States and the Soviet Union devolved into regional disputes around the world.

While military and political frictions made the biggest headlines, the Cold War couldn’t be well understood without using economic theory — specifically, game theory, which analyzes the strategic logic of threats, credibility and conflict.

But this analytical path only serves to remind us that there are lots of moving parts to consider, and a spectrum of possible outcomes. The only aspect that looks like a sure thing, as Cowen reminds, is the low probability that the fundamental problem will be quickly defused. “It is unlikely that Russia will happily reverse course and hand back Crimea, and so we may well see some careful calculations on how negative those longer-term consequences will be.”

Suddenly it seems that we’re in a new new era… again. As such, it’s time to rethink yesterday’s assumptions on a range of subjects, from risk premia to macro projections.

“The West, acting as if it solely and arrogantly represents the international community, has formulated a hazardous policy to isolate Russia,” advises the Centre for Research on Globalization (CRG). “This ill-advised strategy is extremely shortsighted on all levels.” Russia, after all, “is fully integrated into the global economy.” The crucial factor boils down to a simple fact: Russia has some hefty economic weapons of its own.

Geopolitical decisions, however, are a function of issues beyond economics. But the price for the Cold War Light will still be quoted primarily in economic terms, i.e., losses. Russia won’t be exempt either, which may ultimately force Putin to reconsider waging a full-scale economic war.