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.

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Erasmus University Rotterdam
ISS Working Papers - General Series
ISS Working Paper Series / General Series
International Institute of Social Studies of Erasmus University (ISS)

Dizaji, S. F., & van Bergeijk, P. (2012). Early phase success and long run failure of economic sanctions. With an application to Iran (No. 544). ISS Working Paper Series / General Series (Vol. 544, pp. 1–44). Retrieved from http://hdl.handle.net/1765/32491