02.12.2019 New Working Papers

New working papers by Mohammad Reza Farzanegan are now available online:

• “The Effects of International Sanctions on Military Spending of Iran: A Synthetic Control Analysis” (CESifo, Munich, 2019, CESifo Working Paper No. 7937):

Abstract

We use the synthetic control method to estimate the effect of international banking and energy sanctions from 2012 to 2015 on military spending of Iran. We create a synthetic control group that mimics the socioeconomic characteristics of Iran before the international sanctions of 2012. We then compare the military spending of the counterfactual Iran without sanction to the factual Iran with sanction for the period of 2003-2015. Over the entire 2013–2015 period, per capita military spending was reduced by about 119 US$ per year on average, which amounts to approximately 54% of the 2012 baseline level. Our findings are robust to a series of tests, including placebo tests.

https://www.cesifo.org/en/publikationen/2019/working-paper/effects-international-sanctions-military-spending-iran-synthetic

 

• “The Opportunity Cost of the Islamic Revolution and War for Iran” (MAGKS No. 29-2019, Marburg):

Abstract

We estimate the opportunity cost for Iran due to the Islamic revolution and eight years’ war with Iraq (1978/79-1988). We apply the synthetic control method in order to compare Iran with a synthetic Iran and answer this counterfactual question. Our results show that, in total, an average Iranian has lost $34,660 (in constant 2010 US$) from 1978 to 1988. This loss is equivalent to 40% of income per capita, which an Iranian could reach at the absence of revolution and war.

https://www.uni-marburg.de/fb02/makro/forschung/magkspapers/paper_2019/29-2019_farzanegan.pdf