Consequences of External Macroeconomic Shocks Transmission Through International Trade Channel: The Case of the Central and Eastern European Countries
The shocks from the EU countries can be directly transmitted to the CEECs due to the intense international trade relations.
The shocks originated in the United States, China (except Hong Kong), Switzerland, Russia, and Turkey could be indirectly transmitted to the CEECs through international trade relations with the EU.
The results of the Johansen cointegration test suggest that the long-run relationship among the CEECs and EU exists.
In addition, the empirical results suggest that the exchange rate shock positively affects the real GDP growth in the CEECs; however, depreciation of the currencies of the main export partners decreases the export flows to these countries. The economic growth in the main export countries positively affects the real GDP growth and real export flows in CEECs. An increase in consumption in the main export countries positively affects the real GDP growth in the CEECs; however, a negative impact of consumption on the real export flows to the main export countries is observed. In addition, the effect of macroeconomic shocks is more significant on real export flows.
This research was funded by a grant (No. MIP-016/2015) from the Research Council of Lithuania.
- Albulescu, C. T. (2011). Economic and financial integration of CEECs: The impact of financial instability. AUCO Czech Economic Review, 5, 27–45.Google Scholar
- Corsetti, G., Pesenti, P., Roubini, N., & Tille, C. (1998). Competitive devaluation: A welfare based approach. NBER WP No 6889, 1998. doi: https://doi.org/10.3386/w6889.
- De Santis, R. (2004). Trade as international transmission mechanism of shocks: The case of central Eastern European Countries. Doctoral dissertation. doi: https://doi.org/10.2139/ssrn.602341.
- Grubel, H. G., & Lloyd, P. J. (1975). Intra-industry trade: the theory and measurement of international trade in differentiated products. New York: Wiley. ISBN 0-470-33000-7.Google Scholar
- Martínez-Zarzoso, I., Voicu, A. M., & Vidovic, M. (2011). CEECs integration into regional and global production networks. Discussion papers number 125. doi: https://doi.org/10.2139/ssrn.1850623.
- Michaely, M. (1996). Trade preferential agreements in Latin America: An ex-ante assessment. World Bank Policy Research Working Paper.Google Scholar
- Rozmahel, P., Kouba, L., Grochová, L., & Najman, N. (2013). Integration of central and Eastern European Countries: Increasing EU heterogeneity? Working paper no. 9.Google Scholar
- Tajoli, L., & De Benedictis, L. (2006). Economic integration and similarity in trade structures. Working paper 54. doi: https://doi.org/10.2139/ssrn.896669.
- Zoltán, J. M., Kovács, M. A., & Oszlay, A. (2001). How far has trade integration advanced? An analysis of the actual and potential trade of three central and Eastern European Countries. Journal of Comparative Economics, 29(2), 276–292. doi: https://doi.org/10.1006/jcec.2001.1709.CrossRefGoogle Scholar