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How do economic sanctions work? How do they not create an arbitrage opportunity?

Even if you get a broker willing to circumvent the sanction (possibly even criminally in the source nation), it still makes the goods more expensive in the target nation. Before the target nation ...
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How do economic sanctions work? How do they not create an arbitrage opportunity?

Another piece of the puzzle: secondary sanctions Say that Silvonia really wants to prevent bullets from falling into Russian hands. Silvonia can tell the world that anyone caught trading bullets to ...
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How do economic sanctions work? How do they not create an arbitrage opportunity?

Of course there is such an opportunity. Because this is economics, you mostly got legal arguments about a single country/economic space. But a lot of the politics around sanctions are about making ...
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How do economic sanctions work? How do they not create an arbitrage opportunity?

The short answer is yes, the impact of sanctions (and other export controls) on the market prices of goods can create an arbitrage opportunity for someone willing to violate or circumvent those ...
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Why does a stronger US dollar translate to potentially lower sales and earning for Microsoft?

I suppose this depends on the demand elasticity of foreign purchasers. BUT, assuming Microsoft doesn't change prices, I assume it means less rev for Microsoft because, if Microsoft sold its software ...
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How do economic sanctions work? How do they not create an arbitrage opportunity?

As the other answer says the sanctions include prohibition on selling to third parties. However, this still creates incentives to cheat on these sanctions. It is not always so easy to determine final ...
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2 votes

How do economic sanctions work? How do they not create an arbitrage opportunity?

Sanctions always include prohibition of circumvention, so the Silvonian bullet seller is not allowed to sell to a third party if he has the slightest reason to assume that the third party just acts as ...
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