Early Phase Success and Long Run Failure of Economic Sanctions: With an Application to Iran

Institute of Social Studies Working Paper No. 544

44 Pages Posted: 3 Jun 2012 Last revised: 4 Jun 2012

See all articles by Sajjad Dizaji

Sajjad Dizaji

Tarbiat Modares University

Peter A. G. van Bergeijk

Erasmus University - Institute of Social Studies (ISS)

Date Written: June 2, 2012

Abstract

We develop a model of the dynamics of economic sanctions in conjunction with the response of the sanction target. We apply this model to the case of the EU and US boycott of Iranian oil. Our VAR model finds significant impacts of sanctions both on key economic variables and on the political system. These effects, however, are limited in time and occur in the first two to four years of the sanction episode only because adjustment of economic structures mitigates the economic and political impact of the sanctions.

Keywords: Vector autoregressive model, sanctions, Iran

JEL Classification: F11, F51

Suggested Citation

Dizaji, Sajjad and van Bergeijk, Peter A.G., Early Phase Success and Long Run Failure of Economic Sanctions: With an Application to Iran (June 2, 2012). Institute of Social Studies Working Paper No. 544, Available at SSRN: https://ssrn.com/abstract=2073475 or http://dx.doi.org/10.2139/ssrn.2073475

Sajjad Dizaji

Tarbiat Modares University ( email )

Jalal Ale Ahmad Highway
Tehran, Tehran 14115-111
Iran

Peter A.G. Van Bergeijk (Contact Author)

Erasmus University - Institute of Social Studies (ISS) ( email )

PO Box 29776
2502 LT The Hague, 2518 AX
Netherlands

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