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Sanctions and the Shadow Economy: Empirical Evidence from Iranian Provinces

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  • Mohammad Reza Farzanegan

    (University of Marburg)

  • Bernd Hayo

    (University of Marburg)

Abstract

Using Iranian-province-level data from 2001–2013, 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, 2018. "Sanctions and the Shadow Economy: Empirical Evidence from Iranian Provinces," MAGKS Papers on Economics 201807, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    • Handle: RePEc:mar:magkse:201807
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    shadow economy; sanctions; Iran;
    All these keywords.

    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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