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

Author

Listed:
  • Andreas Billmeier
  • Dalia S Hakura

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.

Suggested Citation

  • Andreas Billmeier & Dalia S Hakura, 2008. "Trade Elasticities in the Middle East and Central Asia; What is the Role of Oil?," IMF Working Papers 08/216, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:08/216
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    References listed on IDEAS

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    Cited by:

    1. Rabah Arezki & Fuad Hasanov, 2013. "Global Imbalances and Petrodollars," The World Economy, Wiley Blackwell, vol. 36(2), pages 213-232, February.
    2. International Monetary Fund, 2010. "Bangladesh; Selected Issues," IMF Staff Country Reports 10/56, International Monetary Fund.
    3. Dzmitry Kruk, 2011. "The Mechanism of Adjustment to Changes in Exchange Rate in Belarus and its Implications for Monetary Policy," BEROC Policy Paper Series 04, Belarusian Economic Research and Outreach Center (BEROC).
    4. International Monetary Fund, 2014. "Liberia; Third Review Under the Extended Credit Facility Arrangement and Request for Waiver of Nonobservance of Performance Criterion and Modification of Performance Criteria," IMF Staff Country Reports 14/197, International Monetary Fund.
    5. Alberto Behar & Armand Fouejieu, 2016. "External Adjustment in Oil Exporters; The Role of Fiscal Policy and the Exchange Rate," IMF Working Papers 16/107, International Monetary Fund.
    6. repec:eee:eneeco:v:71:y:2018:i:c:p:186-200 is not listed on IDEAS
    7. Hassan, Syeda Anam & Zaman, Khalid, 2012. "Effect of oil prices on trade balance: New insights into the cointegration relationship from Pakistan," Economic Modelling, Elsevier, vol. 29(6), pages 2125-2143.

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