Oil Prices, Geography and Endogenous Regionalism: Too Much Ado About (Almost) Nothing

Daniel Mirza and Habib Zitouna

Working Papers from CEPII research center

Abstract: This paper studies the effect of oil prices on the geography of international trade. We model transport costs as a function of variable and fixed costs. By affecting the first cost component, oil prices can then modify the structure of transportation costs across partners. This, we argue, acts as a factor of distortion in relative prices, thereby creating a reallocation of trade at the expense of remote countries. In that respect, an increase in oil prices should favor regionalism.

Keywords: REGIONALISM; OIL PRICES; GEOGRAPHY; TRANSPORT (search for similar items in EconPapers)
JEL-codes: F15 F19 F20 L91 (search for similar items in EconPapers)
Date: 2009-10
New Economics Papers: this item is included in nep-ene and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: Oil Prices, Geography and Endogenous Regionalism: Too Much Ado About (Almost) Nothing (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepidt:2009-26

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