Spillovers from Global and Regional Shocks to Armenia

By Knarik Ayvazyan, Teresa Daban Sanchez

November 23, 2015

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Format: Chicago

Knarik Ayvazyan, and Teresa Daban Sanchez. Spillovers from Global and Regional Shocks to Armenia, (USA: International Monetary Fund, 2015) accessed December 23, 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

Using a structural vector auto-regression (SVAR) model, this paper examines the size, geographical sources, and transmission channels of global and regional shocks to the Armenian economy. Results show that Armenian economic activity is strongly influenced by global demand shocks and changes in oil prices, yet relatively immune to financial volatility. Transmission takes place through the Russian and EU economies, remittances, and external borrowing. The role of exports and tourism is low. Russia is key in transforming the potentially negative impact of an increase in oil prices into a positive event, through stronger remittances and exports. Services and construction, which depend significantly on remittances and external borrowing, are the most affected by global and regional shocks.

Subject: Balance of payments, Econometric analysis, Exports, Financial sector policy and analysis, International trade, Oil prices, Prices, Remittances, Spillovers, Structural vector autoregression

Keywords: Armenia, Business cycles, Commodity price, Exports, External borrowing, Gas price agreement, Global, Oil price, Oil prices, Price, Real GDP, Remittances, Spillovers, Structural vector autoregression, SVAR, Trade, Trading partners, Transmission channels, WP

Publication Details

Pages:

25
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2015/241
Stock No:

WPIEA2015241
ISBN:

9781513590462
ISSN:

1018-5941

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