An Estimation of the Impact of Economic Sanctions and Oil Price Shocks on Iran-Russian Trade: Evidence From A Gravity- Vec Approach

This article is an empirical attempt to explore the relationship between sanctions (financial and non-financial),oil price shocks and iran-russian bilateral trade flows over the period 1991-2014. in contrast to earlier studies in which a gravity model has been estimated through a panel data approach,in this paper the authors apply a gravity model for only two countries and do the estimations using the vector error correction approach. the overall estimation results indicate that financial sanctions,non-financial sanctions and oil price shocks negatively impact the iran-russian trade. furthermore,financial sanctions had the greatest negative impact on iran-russian trade rather than non-financial sanctions and sharp oil price shocks. © 2017,university of teheran. all rights reserved.