TY - CEPII
A1 - Daniel Mirza
A1 - Habib Zitouna
TI - Oil Prices, Geography and Endogenous Regionalism: Too Much Ado About (Almost) Nothing
IS - 2009-26
T3 - Working Papers
KW - REGIONALISM
KW - OIL PRICES
KW - GEOGRAPHY
KW - TRANSPORT
N2 - This paper studies the effect of oil prices on the geography of international trade. We model transport costs as a function of variable and fixed costs. By affecting the first cost component, oil prices can then modify the structure of transportation costs across partners. This, we argue, acts as a factor of distortion in relative prices, thereby creating a reallocation of trade at the expense of remote countries. In that respect, an increase in oil prices should favor regionalism.
ER -