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

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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.

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  • Khan, Nazmus Sadat, 2020. "Spillover Effects of Trade Shocks in the Central and Eastern European and Baltic Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 35(1), pages 39-68.
    • Handle: RePEc:ris:integr:0789
    DOI: 10.11130/jei.2020.35.1.39
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    Cited by:

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    3. Ardiyono, Sulistiyo K. & Patunru, Arianto A., 2023. "Firms’ responses to foreign demand shocks: Evidence from Indonesia after the global financial crisis," Economic Modelling, Elsevier, vol. 128(C).

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    More about this item

    Keywords

    Trade; Spillover Effects; Global Vector Auto-Regression; Central and Eastern European and Baltic Countries.;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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