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Oil Price Shock and Structural Changes in CMEA Trade

Author

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  • Beckmann, Elisabeth
  • Fidrmuc, Jarko

Abstract

We analyse trade between countries of the Council of Mutual Economic Assistance in Eastern Europe between 1950 and 1990. Despite central planning and political motivation of the CMEA, we show that trade could be explained by standard demand factors surprisingly well. Moreover, 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. In particular, it used energy exports as an instrument of foreign policy. In turn, the responses of the individual CMEA countries in Central Europe were largely different.

Suggested Citation

  • 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.
  • Handle: RePEc:lmu:muenec:10963
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    File URL: https://epub.ub.uni-muenchen.de/10963/1/CMEAOilShocks.pdf
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    References listed on IDEAS

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    1. 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.
    2. Richard Baldwin & Daria Taglioni, 2006. "Gravity for Dummies and Dummies for Gravity Equations," NBER Working Papers 12516, National Bureau of Economic Research, Inc.
    3. Ben-David, D. & Papell, D.H., 1996. "Structural Change and International Trade," Papers 41-96, Tel Aviv.
    4. 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.
    5. Jean-Philippe Stijns, 2003. "An Empirical Test of the Dutch Disease Hypothesis using a Gravity Model of Trade," International Trade 0305001, EconWPA.
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    Cited by:

    1. 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.

    More about this item

    Keywords

    economic history; free trade areas; political economy; structural break; gravity model; oil price; CMEA trade;

    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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