Asymmetric industrial energy prices and international trade

Misato Sato () and Antoine Dechezlepr�tre
Authors registered in the RePEc Author Service: Antoine Dechezleprêtre

No 178, GRI Working Papers from Grantham Research Institute on Climate Change and the Environment

Abstract: This paper measures the response of bilateral trade flows to differences in industrial energy prices across countries. Using a panel for the period 1996-2011 including 42 countries, 62 sectors and covering 60% of global merchandise trade, we estimate the short-run effects of sector-level energy price asymmetry on trade. We find that changes in relative energy prices have a statistically significant but very small impact on imports. On average, a 10% increase in the energy price difference between two country-sectors increases imports by 0.2%. The impact is larger for energy-intensive sectors. Even in these sectors however, the magnitude of the effect is such that changes in energy price differences across time explain less than 0.01% of the variation in trade flows. Simulations based on our model predict that a �40-65/tCO2 price of carbon in the EU ETS would increase Europe�s imports from the rest of the world by less than 0.05% and decrease exports by 0.2%.

Date: 2015-01
New Economics Papers: this item is included in nep-ene and nep-int
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Citations: View citations in EconPapers (48)

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Related works:
Journal Article: Asymmetric industrial energy prices and international trade (2015)
Working Paper: Asymmetric Industrial Energy Prices and International Trade (2015)
Working Paper: Asymmetric industrial energy prices and international trade (2015)
Working Paper: Asymmetric industrial energy prices and international trade (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:lsg:lsgwps:wp178

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