IDEAS home Printed from https://ideas.repec.org/a/kap/iecepo/v22y2025i4d10.1007_s10368-025-00694-4.html
   My bibliography  Save this article

Inflation cost of strategic goods export restriction: evidence from dynamic spatial panel data model

Author

Listed:
  • William W. Chow

    (Beijing Normal - Hong Kong Baptist University)

Abstract

This paper analyzes the inflation cost of geopolitical tension as manifested via trade in strategic goods. A nonlinear state space model containing spatial elements is specified for the task which has an added advantage of permitting endogenous spatial linkages with the latter being a proxy for geopolitical relationships. Estimation is performed using Particle MCMC methods. It is found that positive inflation spillover exists among five major world powers, and its presence would help propagate structural shocks to non-origin countries by up to 36% the size of the source disturbance. Two complementary but opposite effects underlie the magnitude of the inflation cost. The aggregate effect of strategic goods trade restriction turns out to be asymmetric and product- and country-pair dependent, with any involvement with China generating the highest costs. Eschewing antagonistic trade tactics conducted on massive scales may well be a way to improve economic well-being.

Suggested Citation

  • William W. Chow, 2025. "Inflation cost of strategic goods export restriction: evidence from dynamic spatial panel data model," International Economics and Economic Policy, Springer, vol. 22(4), pages 1-25, October.
    • Handle: RePEc:kap:iecepo:v:22:y:2025:i:4:d:10.1007_s10368-025-00694-4
    DOI: 10.1007/s10368-025-00694-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10368-025-00694-4
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10368-025-00694-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:iecepo:v:22:y:2025:i:4:d:10.1007_s10368-025-00694-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.