US Treasury hires economists to study consequences of sanctions

The US Treasury Department hired two economists to study the effects and unintended consequences of sanctions, the financial tools that have come to play a central role in US foreign policy.

The Sanctions Economic Analysis Unit will research the collateral damage of sanctions before they’re imposed, and after they’ve been put in place to see if they should be adjusted. Treasury announced last September it was creating the new positions.

The chief sanctions economist will be Rachel Lyngaas, who previously served as an economist with the International Monetary Fund. Her deputy will be Leena Bhatnagar, a Treasury staffer has worked on US policy toward Asia. More hiring is expected, with two job openings posted.

The US has vastly expanded the use of sanctions since the Sept. 11 attacks, and Russia’s invasion of Ukraine in early 2022 prompted a massive campaign of financial punishments as the US and its allies sought to constrain President Vladimir Putin’s ability to finance the war.

Some researchers argue that sanctions are overused, difficult to manage and almost impossible to remove once put in place. A recent report from the Center for Economic and Policy Research focused on the human costs of sanctions, finding that they make living conditions far worse in target countries.

Brian Nelson, the Treasury under secretary for Terrorism and Financial Intelligence, said the department was committed to studying the consequences of sanctions on their targets as well as their effects on partners and allies.

“How you identify and then are able to mitigate those consequences in advance” is important, Nelson told a conference in Washington. “Did the sanction actually achieve the result that we were seeking?”