Iran and the Global Economy: The Cost of Action
Homeland Security Digital Library Blog 2012-11-27
Summary:
Sanctions, Military Strikes, and Other Potential Actions Against Iran
A new report from the Federation of American Scientists examines the impact that U.S. actions against Iran's nuclear program might have on the global economy. The findings in this report are based on the opinions of nine subject matter experts (SMEs). These experts focused on three questions. First, what outcomes might accompany certain U.S.-led actions against Iran? Second, how likely are these outcomes to occur? Third, what are the possible impacts of these outcomes on the global economy?
The experts considered six hypothetical scenarios and their estimated cost to the international economy:
- Increasing Pressure ($64 billion)
- Isolation and Persian Gulf Blockade ($325 billion)
- Surgical Strikes ($713 billion)
- Comprehensive Bombing Campaign ($1.2 trillion)
- Full-Scale Invasion ($1.7 trillion)
- De-Escalation ($60 billion)
The authors are careful to note that this study does not endorse any specific action or inaction. Dealing with the Iranian nuclear program is a complicated problem that involves more than just economic factors. Nevertheless, policymakers should not ignore the economic consequences of decisions regarding Iran.