How vulnerable is the Soviet economy?: The effectiveness of economic sanctions |
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Authors: | Andries S Brandsma AJHughes Hallett |
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Institution: | Andries Brandsma is assistant professor and Andrew Hughes Hallett associate professor in the Macroeconomic Policy Group at Erasmus University, PO Box 1738, 3000 DR Rotterdam, theNetherlands |
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Abstract: | The effect of trade embargoes as a measure of foreign policy can be unpredictable. Using a framework of game theory based on macro-economic model Sovmod I from the Stanford Research Institute, the efficacy of future US sanctions on the USSR is examined. The West cannot force the Soviet economy far off its preferred growth path, but it can put pressure on its trade deficit (and thus foreign exchange reserves). The best strategy for the USA is the selective encouragement of trade that implicitly carries the threat of embargo. |
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Keywords: | trade barriers USSR economic policies |
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