Investigating the Impact of Economic Sanctions Shocks on Added Value and Investment in Iran’s Mining Sector (RDCGE Model Approach)

Document Type : Scientific paper

Authors

1 PhD student in Economics, Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

2 Associate Professor of Economics, Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

3 Professor of Economics, Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

Abstract

Undoubtedly, examining the manner and mechanism of impact of shocks caused by economic sanctions on the country's mining sector can help the officials and economic planners of the country to better face and reduce their negative economic consequences, including reduction in production and added value, reduction in employment, reduction in investment, etc., in the mining sector. Therefore, in this study, for the first time, the effects of shocks caused by economic sanctions (1. the shock of the increase in the exchange rate, 2. the shock of the decrease in the import of raw materials, capital and intermediate goods, 3. the shock of the decrease in crude oil export income and 4. The shock of non-oil export reduction) on Iran's mining sector. For this purpose, the required data was collected from the social accounting matrix and the Recursive Dynamic Computable Equilibrium (RDCGE) model was used to analyze the data. The results showed that among the shocks caused by economic sanctions, in order: the shock caused by the increase in the exchange rate, the shock caused by the decrease in the import of raw materials, capital and intermediate goods, the shock caused by the decrease in crude oil export income and the shock caused by the reduction of non-oil exports have the greatest impact on the added value and investment of Iran's mining sector.

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History

  • Receive Date: 22 April 2024
  • Revise Date: 05 May 2024
  • Accept Date: 08 May 2024

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