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Oil Price Shock and Structural Changes in CMEA Trade: Pouring Oil on Troubled Waters?

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  • Elisabeth Beckmann
  • Jarko Fidrmuc

Abstract

We analyse trade between countries of the Council of Mutual Economic Assistance in Eastern Europe between 1950 and 1990. Despite central planning of the CMEA, we show that trade could be explained by standard demand factors surprisingly well. We document that the oil price crisis had several repercussions on Eastern Europe. The Soviet Union as a supplier of crude oil benefited from the energy crisis in the 1970s. By contrast, the individual CMEA countries in Central Europe did not enjoy improved terms of trade with the rest of the world and the CMEA as a whole responded to the oil crisis by intensifying intra-CMEA trade and turning inwards

Suggested Citation

  • Elisabeth Beckmann & Jarko Fidrmuc, 2012. "Oil Price Shock and Structural Changes in CMEA Trade: Pouring Oil on Troubled Waters?," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 9(1), pages 31-49, April.
    • Handle: RePEc:liu:liucej:v:9:y:2012:i:1:p:31-49
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    References listed on IDEAS

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    1. Beckmann, Elisabeth & Fidrmuc, Jarko, 2009. "Oil Price Shock and Structural Changes in CMEA Trade," Discussion Papers in Economics 10963, University of Munich, Department of Economics.
    2. Jean-Philippe Stijns, 2003. "An Empirical Test of the Dutch Disease Hypothesis using a Gravity Model of Trade," International Trade 0305001, University Library of Munich, Germany.
    3. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    4. Tolonen, Yrjana, 1988. "Some macroeconomic consequences of trade with centrally planned economies," Journal of Comparative Economics, Elsevier, vol. 12(3), pages 345-361, September.
    5. Ben-David, Dan & Papell, David H., 1996. "Structural Change and International Trade," Foerder Institute for Economic Research Working Papers 275621, Tel-Aviv University > Foerder Institute for Economic Research.
    6. Korhonen, Iikka & Ledyaeva, Svetlana, 2010. "Trade linkages and macroeconomic effects of the price of oil," Energy Economics, Elsevier, vol. 32(4), pages 848-856, July.
    7. Jarko Fidrmuc & Sylvia Kaufmann & Andreas Resch, 2008. "Structural breaks in Austrian foreign trade with Eastern Europe during the early 1970s," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 35(5), pages 465-479, December.
    8. Korhonen, Iikka & Ledyaeva, Svetlana, 2010. "Trade linkages and macroeconomic effects of the price of oil," Energy Economics, Elsevier, vol. 32(4), pages 848-856, July.
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    Cited by:

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • N74 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: 1913-

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