The Impact of COVID-19 on International Trade of North Macedonia with its Largest Trading Partners
Keywords:
Covid-19, International trade, North Macedonia, VECM and VAR modelAbstract
World trade during the period of the Covid-19 pandemic faced an unexpected situation that resulted in a collapse. All economic indicators took a downward turn and this situation was especially challenging for developing countries, such as North Macedonia. This paper aims to analyze the impact of Covid-19 on foreign trade in North Macedonia with its largest trading partner. The empirical analysis was conducted using the VECM and VAR models, as more suitable econometric models for analyzing the impact of Covid-19 on trade between North Macedonia and its largest trading partners, both in the short and long term. The study encompasses a 24-year time series dataset, spanning from Q1-1997 to Q4-2021, and incorporates a dummy variable representing the Covid-19 period. Based on the results, the impact of Covid-19 was evident in all trading partner countries, but it varied in strength and timing. In the long run, Covid-19 had a negative effect on trade with Belgium and Serbia. In the short term, Covid-19 affected trade with all trading partner countries that were included in the analysis, except for trade with Serbia.
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References
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