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Trade Elasticities in the Middle East and Central Asia: What is the Role of Oil?
Author:
Mr. Andreas Billmeier null

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and
Ms. Dalia S Hakura
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Series:
IMF Working Papers
Volume/Issue:
Volume 2008: Issue 216
Language:
English
Publication Date:
01 Sep 2008
DOI:
https://doi.org/10.5089/9781451870749.001
ISBN:
9781451870749
ISSN:
1018-5941
Pages:
33
Keywords:
WP; export price; trade balance elasticity; foreign currency; price elasticity; volume elasticity
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund