Investigating the Effect of Economic Sanctions on the Balance of Foreign Payments of the Islamic Republic in Iran: The Application of Dynamic Systems

Document Type : Research Paper

Authors

1 Department of Economics and Accounting, faculty of Management, Economics and Accounting,University Of Hormozgan, Bandar Abbas, Iran

2 Department of Statistics, Faculty of Mathematics & Computer, Shahid Bahonar University of Kerman, Kerman, Iran

3 Faculty of Economics and Management, University of Sistan and Baluchestan, Zahedan, Iran

Abstract

Since the revolution, Western countries such as the United States of America, the European Union, and the United Nations Security Council have consistently implemented a variety of extensive sanctions on the Islamic Republic of Iran. These sanctions have had a significant impact on Iran's foreign balance of payments, particularly in the area of foreign trade. To analyses the effects of these sanctions, a dynamic systems approach was used to simulate Iran's foreign trade pattern. Additionally, the opinions of 15 economics experts were collected through fuzzy questionnaires and analyses using the fuzzy logic method to determine the variable index of sanctions. The research period covered 1979-2021, and four scenarios were examined to assess the economic effects of sanctions on Iran's foreign trade model. The results revealed that sanctions on Iran's exports pose the greatest risk to the country's foreign balance, highlighting the importance of focusing on export development to mitigate the impact of economic sanctions. Furthermore, the study suggests that leveraging trade agreements and strategic partnerships with regional countries can help mitigate the economic consequences of sanctions.

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History

  • Receive Date: 01 December 2022
  • Revise Date: 29 November 2023
  • Accept Date: 04 December 2023

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