The Impact of UN and US Economic Sanctions on GDP Growth

University of Trier Research Papers in Economics No. 8/14

34 Pages Posted: 29 Mar 2014 Last revised: 21 May 2014

See all articles by Matthias Neuenkirch

Matthias Neuenkirch

University of Trier - Faculty of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Florian Neumeier

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: May 20, 2014

Abstract

In this paper, we empirically assess how economic sanctions imposed by the UN and the US affect the target states’ GDP growth. Our sample includes 68 countries and covers the period 1976–2012. We find, first, that sanctions imposed by the UN have a statistically and economically significant influence on economic growth. On average, the imposition of UN sanctions decreases the target state’s real per capita GDP growth rate by 2.3–3.5 percentage points (pp). These adverse effects last for a period of 10 years. Comprehensive UN economic sanctions, that is, embargoes affecting nearly all economic activity, trigger a reduction in GDP growth by more than 5 pp. Second, the effect of US sanctions is much smaller and less distinct. The imposition of US sanctions decreases GDP growth in the target state over a period of 7 years and, on average, by 0.5–0.9 pp.

Keywords: Economic growth, economic sanctions, United Nations, United States

JEL Classification: F43, F51, F52, F53

Suggested Citation

Neuenkirch, Matthias and Neumeier, Florian, The Impact of UN and US Economic Sanctions on GDP Growth (May 20, 2014). University of Trier Research Papers in Economics No. 8/14, Available at SSRN: https://ssrn.com/abstract=2417217 or http://dx.doi.org/10.2139/ssrn.2417217

Matthias Neuenkirch (Contact Author)

University of Trier - Faculty of Economics ( email )

Universitätsring 15
Trier, 54296
Germany
+49 - (0)651 - 201 - 2629 (Phone)

HOME PAGE: http://www.uni-trier.de/index.php?id=50130

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Florian Neumeier

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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