Macroeconomic Impacts of Export Barriers in a Dynamic CGE Model

A large economic literature discusses the implications of export sanctions for a variety of states around the world. This paper investigates the macrolevel consequences of imposing oil export barriers on an oil exporting country. We employ a large real financial computable general equilibrium for Iran. The model is calibrated based on 1999 Social Accounting Matrix for the economy of Iran including 112 commodities and 47 activities. We find that the impact of a 50% negative shock in oil export would amount to a 4.6% reduction in GDP, a 6.8% fall in private consumption, a 20.2% cut in government spending, a 20.4% decrease in import, a 9.9% contraction in capital formation, and a+ 29.2% increase in non-oil export. We also find that there is a conflict between government benefits and national benefit. Our sensitivity analysis proves the robustness of the results