Nuremberg Research Seminar in Economics on 26 November 2025, LG 0.423
You are invited to join the weekly Nuremberg Research Seminar in Economics on 26 November 2025, from 13.15 to 14.45 pm. The seminar will be held in room LG 0.423. Feodora Teti (ifo Institute) will be talking about “Escaping Trade Policy”.
More information can be found here:
How are high trade barriers evaded? This paper develops a general-equilibrium model of international trade featuring endogenous re-exporting (“evasion”) via third countries. The framework distinguishes between legal trade diversion and illicit evasion. We apply our model to the wide-ranging export controls imposed by Western countries on Russia. Using transaction-level Russian customs data, we document substantial post-sanctions imports of goods originating in sanctioning countries but arriving via intermediary hubs. We conduct counterfactual exercises comparing the observed enforcement level with two benchmarks: perfect enforcement with no re-exporting, and a world with unconstrained evasion. Our results suggest that the observed level of evasion substantially dampens the effectiveness of sanctions, though far less than it would under unconstrained evasion.