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An Estimation of The Impact of Economic Sanctions and Oil Price Shocks on Iran-Russian Trade: Evidence from a Gravity- VEC Approach

Author

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  • Allah Morad Seif

    () (Department of Economics, Imam Hussein Comprehensive University, Tehran, Iran.)

  • Hossein Panahi

    () (Department of Economics, Tabriz University, Tabriz, Iran.)

  • Davoud Hamidi Razi

    () (Department of Economics, Tabriz University, Tabriz, Iran.)

Abstract

This article is an empirical attempt to explore the relationship between sanctions (financial and non-financial), oil price shocks and Iran-Russian bilateral trade flows over the period 1991–2014. In contrast to earlier studies in which a gravity model has been estimated through a panel data approach, in this paper the authors apply a gravity model for only two countries and do the estimations using the vector error correction approach. The overall estimation results indicate that financial sanctions, non-financial sanctions and oil price shocks negatively impact the Iran-Russian trade. Furthermore, financial sanctions had the greatest negative impact on Iran-Russian trade rather than non-financial sanctions and sharp oil price shocks.

Suggested Citation

  • Allah Morad Seif & Hossein Panahi & Davoud Hamidi Razi, 2017. "An Estimation of The Impact of Economic Sanctions and Oil Price Shocks on Iran-Russian Trade: Evidence from a Gravity- VEC Approach," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(3), pages 469-497, Summer.
  • Handle: RePEc:eut:journl:v:21:y:2017:i:3:p:469
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