Trade Elasticities in the Middle East and Central Asia: What is the Role of Oil?

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Trade Elasticities in the Middle East and Central Asia: What is the Role of Oil?

Author Info

Andreas Billmeier
Dalia Hakura

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Abstract

The analysis in this paper suggests that import and export volume elasticities are markedly lower in oil-exporting Middle East and Central Asian countries than in non-oil countries in the region. A key implication of this finding is that a real appreciation of the exchange rate in oil-exporting countries would achieve little in terms of expenditure switching: an appreciation does not boost imports and non-oil exports constitute only a small share of GDP and total trade in these countries. Therefore, while a real appreciation lowers the current account surplus of oil-exporting countries through valuation effects, the contribution to lowering global imbalances may be more limited.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 08/216.

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Length: 33 pages
Date of creation: 15 Sep 2008
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Handle: RePEc:imf:imfwpa:08/216

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This paper has been announced in the following NEP Reports:

NEP-ALL-2008-10-28 (All new papers)
NEP-CBA-2008-10-28 (Central Banking)
NEP-DEV-2008-10-28 (Development)
NEP-ENE-2008-10-28 (Energy Economics)
NEP-IFN-2008-10-28 (International Finance)
NEP-INT-2008-10-28 (International Trade)

References listed on IDEAS
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Rabah Arezki & Fuad Hasanov, 2009. "Global Imbalances and Petrodollars," IMF Working Papers 09/89, International Monetary Fund. [Downloadable!]

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