The Effects of Economic Sanctions and Speculative Attacks on Inflation

Farshid Pourshahabi () and Nazar Dahmardeh
Additional contact information
Farshid Pourshahabi: Department of Economics, University of Bojnord, Bojnord, Iran.
Nazar Dahmardeh: Department of Economics, University of Sistan Baluchestan, Zahedan, Iran.

Iranian Economic Review (IER), 2014, vol. 18, issue 3, 45-67

Abstract: This paper surveys the persian monetary crises due to economic sanctions and speculative attacks that leads to high inflation. Economic sanctions are associated with various forms of trade barriers and restriction on financial transactions. Among the most influential sanctions on Iran's oil export and central bank sanctions are noted that their Aims to reduce Iran's oil revenues and Devaluation of the national currency of Iran. New economic sanctions have greatest effect on foreign currency transactions and foreign currency speculative attacks can lead to devaluation of the national currency to be stimulated inflationary pressures. This study introduced a new inflation function based on Neo-Keynesian framework in the case of oil exporting counties. Also dynamics of speculative attacks based on Markov Regime-Switching GARCH (MRS-GARCH) model is used to capture some of the exchange rate dynamics associated with the speculative attacks. The results of co-integration vector estimation using the FMOLS approach indicated that speculative attacks have positive effect on inflation but sanctions affect inflation indirectly through speculative attacks, stagnation, currency crisis, expected inflation and etc.

Keywords: Economic Sanctions; Speculative Attacks; inflation. (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
ftp://80.66.179.253/eut/journl/20143-3.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eut:journl:v:18:y:2014:i:3:p:45

Access Statistics for this article

Iranian Economic Review (IER) is currently edited by Dr.Hossien Abbasinejad

More articles in Iranian Economic Review (IER) from Faculty of Economics,University of Tehran.Tehran,Iran Contact information at EDIRC.
Bibliographic data for series maintained by [z.rahimalipour] ().