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

Author/Editor:

Andreas Billmeier ; Dalia S Hakura

Publication Date:

September 1, 2008

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 08/216

Subject:

English

Publication Date:

September 1, 2008

ISBN/ISSN:

9781451870749/1018-5941

Stock No:

WPIEA2008216

Format:

Paper

Pages:

33

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