International economy
Reza Ashraf Ganjoui; Saeed Iranmanesh
Abstract
In recent decades, international sanctions have become a recurring feature in political interactions between some governments. The United States has imposed the most economic sanctions since World War II. Also, several actions have been taken by the United Nations in recent years. In this study, the ...
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In recent decades, international sanctions have become a recurring feature in political interactions between some governments. The United States has imposed the most economic sanctions since World War II. Also, several actions have been taken by the United Nations in recent years. In this study, the effect of economic sanctions of the United Nations and the United States on the misery index during the years 1991-2020 has been investigated by using the generalized least squares (GLS) method. The results indicate that the United Nations and United States sanctions have a significant effect on the misery index. On average, the imposition of sanctions by the United Nations and the United States have increased the misery index of the target country by 8.12 and 6.49, respectively. Also, the positive and increasing effect caused by the application of comprehensive economic sanctions of the United Nations on the misery index is more than the sanctions of the United States. IntroductionBefore the First World War, the countries with high military and economic power used the only means available to implement their desired policies in the target countries through war. However, since 1914 during the First World War and more widely since 1990, the military powers replaced the lever of war with economic and political sanctions to advance their goals in different countries (Medlicot, 1952). In recent decades, international sanctions have become a recurring feature in political relations between some states. Difficulties caused by embargo can take different forms. Experts consider sanctions as economic tools that affect the economic interests of countries. According to what has been said, the innovation of this article is to examine the impact of economic sanctions of the United Nations and the United States on the misery index of the target countries, including Iran. Methodology and MethodsThe current research is an applied research in terms of its purpose. In this study, documentary methods will be used to identify variables and collect information, and statistical and econometric methods will be used for its analysis. The statistics and information needed for the research were extracted from the information available on the official website of the World Bank, the Federal Reserve Bank, the websites of the United States Congress and the United Nations website. In the present study, to evaluate the effects of the economic sanctions of the United Nations and the United States on the misery index of the sanctioned countries, the following model is estimated following the studies of Karimi et al. Where Yi,t is the dependent variable, 𝑋i,t represents a vector of control variables including liquidity (broad money) (LIQ), capital stock (K), gross domestic product at constant US dollar prices (2010=100) (GDP) and the degree of trade openness (𝑇𝑂) is imports and exports divided by GDP , UNi,t is the independent variable of United Nations sanctions, USi,t is the independent variable of United States sanctions, 𝛼i is the intercept, δt is the time effects on the constant term, is the error term of the model. ConclusionThe results of the estimation showed that the effect of United Nations and United States sanctions on the misery index was positive and significant. UN sanctions with a coefficient of 8.12 and sanctions of the United States with a coefficient of 6.49 have been effective on the misery index. Also, according to the results of the study, proper liquidity management, reducing the economy's dependence on certain product income, reviewing business relations and moving and replacing business partners are among the solutions that can play an effective role in reducing the negative consequences of sanctions for the target countries. To solve each of the two problems of inflation and stagnation, special policies are used, and generally, the monetary policies used for inflationary conditions are opposite to the policies that can be used for stagnation, in such a way that in economic theories, in inflationary conditions, monetary contractionary policies are used in recessionary conditions. Monetary expansion and fiscal expansion policy are suggested. But in a situation where the increase in the misery index is caused by the simultaneous increase in inflation and unemployment, it is very difficult to choose and apply the right policy in such a way that the implementation of a monetary contraction policy will lead to stagnation and an expansionary monetary policy will also lead to inflation. Economic management has special requirements in the context of the intensification of sanctions.
