Spillover Effects of Trade Shocks in the Central and Eastern European and Baltic Countries

Nazmus Khan ()

Journal of Economic Integration, 2020, vol. 35, issue 1, 39-68

Abstract: How does a trade shock occurring in each Central and Eastern European and Baltic country affect the economic growth and inflation of other CEE-Baltic countries? This paper addresses this question by comparing the spillover effects of trade shocks using a global vector auto-regression model with 10 CEE-Baltic countries. In constructing the foreign variables, a time-varying trade weight is used instead of a fixed weight. Oil price is included as a global variable because of its importance to the countries in the region. The results demonstrate that the trade spillover effects are strong in the region and have a positive impact on economic growth and inflation in the region. However, the Czech Republic, Slovakia, and Poland play a greater role in this transmission process than the other countries.

Keywords: Trade; Spillover Effects; Global Vector Auto-Regression; Central and Eastern European and Baltic Countries. (search for similar items in EconPapers)
JEL-codes: C32 F43 O47 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0789

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