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Sanctions and the shadow economy: empirical evidence from Iranian provinces

Author

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  • Mohammad Reza Farzanegan
  • Bernd Hayo

Abstract

Using Iranian province level data from 2001 to 2013, this study finds that the international sanctions of 2012/2013 had a significantly stronger negative impact on the growth rate of the shadow economy than they did on the official GDP growth rate. Thus, the international sanctions on Iran have damaged the informal economy even more than the formal economy.

Suggested Citation

  • Mohammad Reza Farzanegan & Bernd Hayo, 2019. "Sanctions and the shadow economy: empirical evidence from Iranian provinces," Applied Economics Letters, Taylor & Francis Journals, vol. 26(6), pages 501-505, March.
    • Handle: RePEc:taf:apeclt:v:26:y:2019:i:6:p:501-505
    DOI: 10.1080/13504851.2018.1486981
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    JEL classification:

    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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