On the Effects of Sanctions on Trade and Welfare: New Evidence Based on Structural Gravity and a New Database

52 Pages Posted: 23 Jul 2019

See all articles by Gabriel J. Felbermayr

Gabriel J. Felbermayr

University of Kiel

Constantinos Syropoulos

LeBow College of Business, Drexel University

Erdal Yalcin

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute; University of Applied Sciences Konstanz

Yoto V. Yotov

Drexel University - Department of Economics & International Business

Date Written: 2019

Abstract

Using a new, global data base covering the years 1950 to 2015, we study the impact of sanctions on international trade and welfare. We make use of the rich dimensionality of our data and of the latest developments in the structural gravity literature. Starting with a broad evaluation by sanction type, we carefully investigate the case of Iran. Effects are significant but also widely heterogeneous across sanctioning countries. Moreover, they depend on the direction of trade. We also perform a counterfactual analysis which translates our partial equilibrium sanction estimates into heterogeneous but intuitive general equilibrium effects within the same framework.

Keywords: sanctions, effectiveness of sanctions, structural gravity

JEL Classification: F100, F130, F140, F500, F510, H500, N400

Suggested Citation

Felbermayr, Gabriel J. and Syropoulos, Constantinos and Yalcin, Erdal and Yalcin, Erdal and Yotov, Yoto, On the Effects of Sanctions on Trade and Welfare: New Evidence Based on Structural Gravity and a New Database (2019). CESifo Working Paper No. 7728, Available at SSRN: https://ssrn.com/abstract=3422152 or http://dx.doi.org/10.2139/ssrn.3422152

Gabriel J. Felbermayr (Contact Author)

University of Kiel ( email )

Olshausenstr. 40
D-24118 Kiel, Schleswig-Holstein 24118
Germany

Constantinos Syropoulos

LeBow College of Business, Drexel University ( email )

3141 Chestnut St
Philadelphia, PA 19104
United States
215-895-2792 (Phone)
215-895-6975 (Fax)

HOME PAGE: http://faculty.lebow.drexel.edu/SyropoulosC/

Erdal Yalcin

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

Poschinger Str. 5
Munich, 01069
Germany

University of Applied Sciences Konstanz ( email )

Alfred-Wachtel-Stra├če 8
Konstanz, 78462
Germany

Yoto Yotov

Drexel University - Department of Economics & International Business ( email )

3141 Chestnut St.
Philadelphia, PA 19104
United States

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