On the Heterogeneous Effects of Sanctions on Trade and Welfare: Evidence from the Sanctions on Iran and a New Database

Gabriel Felbermayr, Constantinos Syropoulos (), Erdal Yalcin and Yoto Yotov

No 2020-4, School of Economics Working Paper Series from LeBow College of Business, Drexel University

Abstract: Using a new, comprehensive database, we study the impact of sanctions on international trade and welfare. Specifically, capitalizing on the latest developments in the structural gravity literature, we quantify the partial and general equilibrium effects of sanctions. Starting with a broad evaluation of the impact of sanctions, we carefully investigate the case of Iran. We find that the effects are significant but also widely heterogeneous across sanctioning countries and dependent on the direction of trade, even within the European Union. We also perform a counterfactual analysis of removing the sanctions on Iran, which translates our partial estimates into sizable and heterogeneous (across both countries and sectors), but also intuitive, general equilibrium effects within the same framework.

Keywords: Sanctions; Effectiveness of Sanctions; Structural Gravity (search for similar items in EconPapers)
JEL-codes: F13 H50 N40 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2020-05-16
New Economics Papers: this item is included in nep-ara and nep-int
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:drxlwp:2020_004

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