Trade in the Mashreq: An Empirical Examination

Rodolphe Blavy

No 2001/163, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; IMF trade restrictiveness index (search for similar items in EconPapers)
Pages: 31
Date: 2001-10-01
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Citations: View citations in EconPapers (4)

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