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How does Russia's economy affect the region? Transmission channels and policy options

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  • Arzoumanian, Shant

Abstract

This paper studies how output fluctuations in Russia are transmitted internationally. Using dynamic panel models, the paper finds that Russia's output fluctuations are an important driver of output fluctuations of countries in the region, especially for oil importers, and are transmitted increasingly via trade and market confidence channels. The magnitude of cross-border spillovers is larger for countries with relatively high bilateral trade concentration, low export diversification, and weak external buffers. The paper also finds evidence that stronger public institutional quality- especially in the fiscal area- may help insulate countries from volatility in the Russian sovereign debt market.

Suggested Citation

  • Arzoumanian, Shant, 2024. "How does Russia's economy affect the region? Transmission channels and policy options," Emerging Markets Review, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:ememar:v:63:y:2024:i:c:s1566014124001006
    DOI: 10.1016/j.ememar.2024.101205
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    References listed on IDEAS

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    1. Jaime Espinosa-Bowen & Mr. Nadeem Ilahi & Fahad Alturki, 2009. "How Russia Affects the Neighborhood - Trade, Financial, and Remittance Channels," IMF Working Papers 2009/277, International Monetary Fund.
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    7. Ara Stepanyan & Agustin Roitman & Gohar Minasyan & Ms. Dragana Ostojic & Mr. Natan P. Epstein, 2015. "The Spillover Effects of Russia’s Economic Slowdown on Neighboring Countries," IMF Departmental Papers / Policy Papers 2015/013, International Monetary Fund.
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    Keywords

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    JEL classification:

    • F1 - International Economics - - Trade
    • F3 - International Economics - - International Finance
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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