The Effect of US and EU Economic Sanctions on Bilateral Trade Flows between Iran and Its Major Trading Partners:An Application of Gravity Model

Economic sanctions appear to be a common feature of political interactions between states. economic sanctions have become increasingly important as alternative to military conflict since the last decade of twentieth century. This paper provides, through a gravity model, an estimation of the impact of economic sanctions on bilateral trade flows between Iran and its major trading partners during 2000 – 2011, disaggregated by the choice of the 1 – digit sections of the Standard International Trade Classification including zero, two, five, six and seven codes. The results show that extensive and limited sanctions have a significant and negative impact on bilateral trade, except for exports of five and seven codes.