Report
From imposition to lifting
2026
Abstract
We combine the latest difference-in-differences estimators for treatments with exit
and structural gravity literature to evaluate the effects of sanctions on trade, when
they are in place and when they are lifted. Our analysis shows that sanctions reduce
trade between senders and targets by 58%, with estimates from our preferred model
50% larger than those from traditional two-way fixed effects (TWFE) models. A
bias decomposition highlights arbitrary weighting and contamination bias in TWFE
estimates. Sensitivity checks confirm the robustness of our findings, emphasizing
the relevance of these methods for gravity estimations, including trade, migration,
foreign investment, and other bilateral flows
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Details
- Title
- From imposition to lifting
- Creators
- Ohyun KwonArne NagengastJangsu YoonYoto V. Yotov
- Publisher
- Deutsche Bundesbank
- Resource Type
- Report
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Other Identifier
- 991022162823704721