Impact of Sanctions Policy Shifts: A Case Study of the United States and Cuba, 1994–2020

ABSTRACT This article offers new evidence to aid the discussion on the economic consequences of easing or tightening sanctions, with Cuba serving as a case study. Even with the persistent sanction regime, a level of trade, remittances and visitors has been sustained between the United States and Cuba, notably since the 1990s, fluctuating with the political climate. This study consolidates data from various sources to gauge the magnitude of this exchange relative to Cuba's GDP and calculates the susceptibility of economic indicators to shifts in sanctions (either easing or tightening) over the past three decades. Econometric findings demonstrate the impact of sanctions on Cuban economic growth. The findings suggest that tight sanctions negatively impact household consumption and Cuba's private sector. However, the data do not show a decline in the value of Cuban government consumption.