The Political Economy of International Finance in an Age of Inequality
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The Political Economy of International Finance in an Age of Inequality

Soft Currencies, Hard Landings

Edited by Gerald A. Epstein

The essays in this book describe and analyze the current contours of the international financial system, covering both developed and developing countries, and focusing on the ways in which the current international financial system structures, and is affected by, profound inequalities in the international system. This keen analysis of key topics in international finance takes a heterodox perspective, with focus on the role of inequalities in power in shaping the structure and outcomes in the international sphere.
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Chapter 9: The cost of a SWIFT kick: Estimating the cost of financial sanctions on Iran

Mariam Majd

Abstract

This chapter estimates the costs to Iran of financial sanctions imposed by the United States in 2012. These sanctions were unprecedented and unique in requiring that the Islamic Republic be removed from the Society for Interbank Financial Telecommunication (SWIFT) payments platform. Using data from the International Monetary Fund’s World Economic Outlook Database, the author empirically analyzes the cost to the Iranian economy of the unique “sanctions package” imposed in 2012. She finds that the cost of full implementation of sanctions (2012–15) to Iranian GDP was, on average, approximately $60.4 billion per year, or about 16.2 percent of what GDP actually was during that time and 13.9 percent of what it would have been if the sanctions had not been imposed.

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