Trade in the Mashreq: An Empirical Examination

October 1, 2001

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Rodolphe Blavy. Trade in the Mashreq: An Empirical Examination, (USA: International Monetary Fund, 2001) accessed November 21, 2024

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.

Subject: Exports, Gravity models, Real exchange rates, Trade balance, Trade barriers

Keywords: IMF trade restrictiveness index, WP

Publication Details

Pages:

31
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2001/163
Stock No:

WPIEA1632001
ISBN:

9781451857931
ISSN:

1018-5941

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