An estimation of the economic cost of recent sanctions on Iran using the synthetic control method

•We use the synthetic control method to estimate the effect of recent international sanctions on Iran's real GDP.•We estimate that Iran's real GDP suffered a hit of more than 17% in the period between 2011 and 2014.•We perform placebo studies to evaluate the credibility of the result.

International sanctions imposed on Iran, targeting primarily Iran's key energy sector and its ability to access the international financial system, have harmed Iran's economic growth, specifically since 2011 through 2014. Using the synthetic control method, this paper estimates that sanctions during this period reduced Iran's real GDP by more than 17% with the largest drop occurring in 2012.