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Decoupling from the East Toward the West? Analyses of Spillovers to the Baltic Countries

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  • International Monetary Fund

Abstract

This paper uses VAR models to examine the magnitude and sources of growth spillovers to the Baltics from key trading partners, as well asfrom the real effective exchange rate (REER). Our results show there are significant cross-country spillovers to the Baltics with those from the EU outweighing spillovers from Russia. Shocks to the REER generally depress growth in the Baltics, and this intensifies over time. We also find that financial and trade channels dominate the transmission of spillovers to the region which partly explains the realization of downside risks to the Baltics from the global slowdown.

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  • International Monetary Fund, 2009. "Decoupling from the East Toward the West? Analyses of Spillovers to the Baltic Countries," IMF Working Papers 2009/125, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2009/125
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    Cited by:

    1. Jaime Espinosa-Bowen & Mr. Nadeem Ilahi & Fahad Alturki, 2009. "How Russia Affects the Neighborhood - Trade, Financial, and Remittance Channels," IMF Working Papers 2009/277, International Monetary Fund.
    2. Mr. Frigyes F Heinz & Ms. Yan M Sun, 2014. "Sovereign CDS Spreads in Europe: The Role of Global Risk Aversion, Economic Fundamentals, Liquidity, and Spillovers," IMF Working Papers 2014/017, International Monetary Fund.
    3. Ms. Iyabo Masha & Ding Ding, 2012. "India's Growth Spillovers to South Asia," IMF Working Papers 2012/056, International Monetary Fund.
    4. Tokunaga, Masahiro & Suganuma, Keiko & Odagiri, Nami, 2018. "From Russia to Eurasia : Specific Features of the “Russosphere” from the Perspective of Business Activities of Japanese Firms," RRC Working Paper Series 77, Russian Research Center, Institute of Economic Research, Hitotsubashi University.
    5. Bayramov, Vugar & Rustamli, Nabi & Abbas, Gulnara, 2020. "Collateral damage: The Western sanctions on Russia and the evaluation of implications for Russia’s post-communist neighbourhood," International Economics, Elsevier, vol. 162(C), pages 92-109.
    6. Talis J. Putninš, 2013. "Exporting by Latvian companies: vitality, drivers of success, and challenges," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 13(2), pages 3-33, December.
    7. Zuzana Brixiova & Margaret H. Morgan & Andreas Wörgötter, 2010. "On The Road to Euro: How Synchronized Is Estonia with the Euro zone?," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 7(1), pages 203-227, June.

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    Keywords

    WP; GDP; Lithuania; Latvia; price;
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