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How (a)symmetric is the response of import demand to changes in its determinants? Evidence from European energy imports

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  • Fedoseeva, Svetlana
  • Zeidan, Rodrigo

Abstract

Energy imports are crucial for European countries, yet little is known about determinants of their import demand. We update long-outdated estimates of import demand elasticities using recent data for crude and derived energy products and contribute to the debate on the asymmetry of import demand by using recent developments in econometric modelling. Our results have important implications for the geopolitics of energy markets in Europe. (Asymmetric) Income seems to be the most relevant determinant of import demand; Economic growth and fossil fuel consumption are correlated, even in the context of the European agenda towards renewables. Our results suggest that European economic recovery may derail the drive for lower fossil consumption, and that changes in the natural gas market may further complicate this drive, especially regarding Russia as the primary supplier to the Eurozone.

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  • Fedoseeva, Svetlana & Zeidan, Rodrigo, 2018. "How (a)symmetric is the response of import demand to changes in its determinants? Evidence from European energy imports," Energy Economics, Elsevier, vol. 69(C), pages 379-394.
  • Handle: RePEc:eee:eneeco:v:69:y:2018:i:c:p:379-394
    DOI: 10.1016/j.eneco.2017.12.009
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    More about this item

    Keywords

    Energy import demand; Eurozone; trade elasticity; asymmetry; NARDL;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q37 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Issues in International Trade

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