Finance

Physics

Accounting

Internal medicine

Business

Capital formation

Advertising

Macroeconomics

Political science

Econometrics

Management

Economics

Newspaper

Revenue

Variance (accounting)

Inflation (cosmology)

Sanctions

Human capital

Economic sanctions

Shock (circulatory)

Theoretical physics

Monetary economics

Market economy

Financial capital

Medicine

Depreciation (economics)

Estimation

Journal of Applied Econometrics

Summary This paper focuses on the identification and quantitative estimation of sanctions on the Iranian economy over the period 1989–2019. It provides a new time series approach and proposes a novel measure of sanctions intensity based on daily newspaper coverage. In absence of sanctions, Iran's average annual growth could have been around 4–5%, as compared to the 3% realized. Estimates of the proposed sanctions‐augmented structural VAR show that sanctions significantly decrease oil export revenues and result in substantial depreciation of Iranian rial, followed by subsequent increases in inflation and falls in output growth. Keeping other shocks fixed, 2 years of sanctions can explain up to 60% of output growth forecast error variance, although a single quarter sanction shock proves to have quantitatively small effects.

Identifying the effects of sanctions on the Iranian economy using newspaper coverage