ABSTRACT
Iran’s real GDP per capita today stands at below its 1976 level. This decline in the average Iranian citizen’s international spending power is mostly a result of the country’s isolation from the international economic system in terms of trade, investment, and financial relations. Iran has been under strict sanctions by the US and its allies, but has also experienced severe mismanagement of its economy over the past four decades. The country’s economic conditions and its economic relations with the world did improve during the time of reformists and moderates in the executive and legislative branches of the Islamic Republic. This study provides some insights and an economic evidence-based analysis of these issues. The analysis suggests a dual causality or endogenous role of Iran in the international economic system. In other words, Iran’s tough stance against the US has usually led to sanctions, which have crippled Iran’s economy; at the same time, the US sanctions have led to the rise of hardliners in power in Iran, which has served to exacerbate Iran’s economic woes.
