Identifying the effect of the US embargo on the Cuban economy: A comment on Bastos, Geloso, and Bologna Pavlik (2026)

RODRIGUEZ, FRANCISCO (2026): Identifying the effect of the US embargo on the Cuban economy: A comment on Bastos, Geloso, and Bologna Pavlik (2026).

Abstract

Bastos, Geloso, and Bologna Pavlik (2026) argue that the US embargo explains less than one-tenth of the difference in per capita income between Cuba and a counterfactual scenario in which the country did not follow socialist economic policies. We show that their results are driven by the use of an elasticity of income to trade openness that is neither representative nor a reasonable upper bound of the values found in the literature and by their choice to attribute the effect of the interaction between the embargo and other determinants of growth solely to those other determinants. We show that, once these problems are corrected, the embargo can account for a substantial fraction, and in some cases all, of Cuba’s post-1959 economic underperformance.

• Item Type: MPRA Paper
• Language: English
• Keywords: Cuba, Economic Sanctions, International Trade, Economic Growth, Socialism
• Subjects: F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy ; Factor Movement Policy ; Foreign Exchange Policy; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence

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