Investigating the Interactive Effect of Logistics Risk and Economic Sanctions on the Producer Price Index in Iran

Amani, Ramin; Ehterami, Mohammad Parsa; Hosseini, Sana

doi:10.22059/jte.2025.392764.1008992

Investigating the Interactive Effect of Logistics Risk and Economic Sanctions on the Producer Price Index in Iran

Document Type : Research Paper

Authors

¹ Department of Economic Development and Planning, Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran.

² Department of Economics, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran.

10.22059/jte.2025.392764.1008992

Abstract

The Producer Price Index (PPI) serves as a key indicator for evaluating price changes in the early stages of production, playing a crucial role in inflation analysis and economic policymaking. Logistics risk and economic sanctions are also significant factors influencing this index, having substantial impacts on production costs and prices. The primary aim of this study is to examine the interactive effect of logistics risk and economic sanctions on the PPI in Iran from 2014 to 2023, using the Dynamic Least Squares method. The results reveal that both economic sanctions and logistics risk have a significant impact on the PPI in Iran. Sanctions, through limiting access to international financial and trade resources, increasing the costs of importing raw materials, and causing exchange rate fluctuations, lead to higher production costs. Meanwhile, logistics risks, stemming from inadequate transportation infrastructure, customs issues, and dependence on imports, directly influence production costs. These challenges are exacerbated by sanctions, which increase transportation and supply chain costs. The interactive effects of these two factors contribute to rising production costs and the growth of the PPI. As a result, reducing logistics risk through infrastructure improvement and enhanced productivity can help mitigate costs and inflation. Furthermore, effective exchange rate policies and sound liquidity management can minimize the adverse effects of sanctions.

Keywords

Main Subjects

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