International Sanctions and Limits of Lerner Symmetry
AEA Papers and Proceedings
vol. 113,
May 2023
(pp. 33-38)
Abstract
After a wave of globalization, trade wars and financial sanctions again become frequent tools of international policymaking, leading to an increased interest in the consequences and effectiveness of international sanctions. Itskhoki and Mukhin (2022b) show that Lerner symmetry provides an important benchmark with import and export sanctions equivalent in terms of their effects on allocations and welfare. This abstracts from several practical issues, including the timing of sanctions, interactions between trade and financial restrictions, and the effects of sanctions on the financial sector. We incorporate these features to study their implications and emphasize points of departure from Lerner symmetry.Citation
Itskhoki, Oleg, and Dmitry Mukhin. 2023. "International Sanctions and Limits of Lerner Symmetry." AEA Papers and Proceedings, 113: 33-38. DOI: 10.1257/pandp.20231043Additional Materials
JEL Classification
- F12 Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F13 Trade Policy; International Trade Organizations
- F32 Current Account Adjustment; Short-term Capital Movements
- F34 International Lending and Debt Problems
- F38 International Financial Policy: Financial Transactions Tax; Capital Controls
- F51 International Conflicts; Negotiations; Sanctions