Trade in the Mashreq: An Empirical Examination

 
Author/Editor: Blavy, Rodolphe
 
Publication Date: October 01, 2001
 
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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: This paper provides a framework for understanding trade patterns in the Mashreq. An augmented gravity model is used to compare actual with expected levels of trade. Trade barriers, political uncertainty, and over-appreciation of domestic currencies seem to explain low levels of international trade. At the intra-regional level, specific trade barriers between Israel and other Mashreq countries reduce further levels of trade. Quite surprisingly, removing Israel from the sample leads to higher actual intra-regional trade than predicted. The analysis suggests that trade liberalization, correction of currency misalignments, reduction of political uncertainty, and improved trade relations with Israel would boost trade in the region.
 
Series: Working Paper No. 01/163
Subject(s): Trade policy | Egypt | Israel | Jordan | Lebanon | Syrian Arab Republic | Economic models

Author's Keyword(s): Egypt | Israel | Jordan | Lebanon | Mashreq | Syria | gravity model | trade policy
 
English
Publication Date: October 01, 2001
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA1632001 Pages: 30
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