Identifying the Effects of Sanctions on the Iranian Economy Using Newspaper Coverage

@article{Laudati2021IdentifyingTE,
  title={Identifying the Effects of Sanctions on the Iranian Economy Using Newspaper Coverage},
  author={Dario Laudati and M. Hashem Pesaran},
  journal={CESifo Working Paper Series},
  year={2021}
}
This paper considers how sanctions affected the Iranian economy using a novel measure of sanctions intensity based on daily newspaper coverage. It finds sanctions to have significant effects on exchange rates, inflation, and output growth, with the Iranian rial over-reacting to sanctions, followed up with a rise in inflation and a fall in output. In absence of sanctions, Iran’s average annual growth could have been around 4 - 5 per cent, as compared to the 3 per cent realized. Sanctions are…