Ma`rifat Eqtesadi

Economic sanctions are a tool against countries, which have different effects on the economy of countries. Removing the effects of sanctions requires identification and policy making to deal with it. On the other hand, one of the effective indicators in improving the economic rank at the international level is the economic complexity index. This research was conducted with the aim of investigating the causal relationship between economic sanctions and economic complexity in Iran. Therefore, the main research question is whether the relationship between sanctions and economic complexity in Iran is two-way? Using vector autoregression (VAR) econometric model and factor analysis has been used to analyze time series data. The results show that among the three major indicators showing the economic sanctions, the price index of export goods is the cause of the complexity index at the confidence level of 90%. That is, with the increase of sanctions, the economic complexity decreases. However, there is no opposite of this relationship, and there is no correlation between other indicators of sanctions and economic complexity, which may be due to Iran's low ranking in the economic complexity index.