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Reflections on the Impact of Economic Sanctions

Constantinos Syropoulos, Yoto V. Yotov
CESifo, Munich, 2023

EconPol Forum 24 (3), 10-14
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  • As exemplified by the 2022 and ongoing sanctions on Russia, economic sanctions are more popular than ever in policy circles and an active topic of research
  • Sanctions aim to achieve political objectives. Nonetheless, despite evidence that their rate of success may be increasing, most sanctions fail to achieve their intended goals
  • The effects on sanctioned states are strong and adverse. However, the severity of these effects is mitigated by the possible diversion of economic activity toward third countries
  • Normally, sanctioning states do not suffer large losses. But the sanctions on Russia indicate that these nations may suffer significant losses too
  • The effects of economic sanctions on third countries, which are transmitted through general equilibrium and extraterritorial channels, may also be extensive and may entail losses or gains

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