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Sanctions and counter-sanctions: What did they do?

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  • Barseghyan, Gayane

Abstract

Taking the multilateral sanctions program launched against Russia in 2014 as a case study, this paper investigates the economic effects of sanctions and counter-sanctions on a target economy. A synthetic control method for comparative case studies is employed to construct counterfactuals. The estimation results demonstrate that in Russia following sanctions and counter-sanctions real GDP per capita, FDI net in flows and income inequality fell, while the ban on agricultural and food imports introduced by Russia boosted the domestic agricultural sector, resulting in higher agricultural productivity and farm worker incomes. Various placebo studies confirm the significance of obtained estimates. Results are robust to random donor samples.

Suggested Citation

  • Barseghyan, Gayane, 2019. "Sanctions and counter-sanctions: What did they do?," BOFIT Discussion Papers 24/2019, Bank of Finland Institute for Emerging Economies (BOFIT).
    • Handle: RePEc:zbw:bofitp:bdp2019_024
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    3. Ahn, Daniel P. & Ludema, Rodney D., 2020. "The sword and the shield: The economics of targeted sanctions," European Economic Review, Elsevier, vol. 130(C).
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    5. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
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    Cited by:

    1. Mikhail Mamonov & Anna Pestova, 2023. "The Price of War: Macroeconomic and Cross-Sectional Effects of Sanctions on Russia," CERGE-EI Working Papers wp756, The Center for Economic Research and Graduate Education - Economics Institute, Prague.

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    More about this item

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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