Sanctions and counter-sanctions : What did they do?

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Title: Sanctions and counter-sanctions : What did they do?
Author: Barseghyan, Gayane
Organization: Bank of Finland
Department / Unit: Institute for Economies in Transition (BOFIT)
Series: BOFIT Discussion Papers
Series number: 24/2019
Year of publication: 2019
Publication date: 9.12.2019
Pages: 28
Subject (yso): pakotteet; ulkomaankauppa
Keywords: Bofit-kokoelma; Venäjä; vastapakotteet
JEL: C33; F51; O50
Other keywords: sanctions; counter-sanctions; synthetic control method
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.
Table of contents: 1 Introduction 3 2 Literature review 5 3 Empirical methodology and data 8 3.1 Methodology 8 3.2 Data and control countries 9 4 Estimation results 10 4.1 Estimated effects 10 4.2 Inference about the estimated effects 15 4.3 Results with random donor samples 7 5 Concluding remarks 19 6 References 20 7 Appendix 24

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