Virtual University Journals
Search
Search
Maritime Chokepoints and Macroeconomic Stability: Public Sector Responses to Disruptions in the Bab el-Mandeb Strait
Elman Azizov1, Fakhar Hussain2, Kamran Abdullayev3, Ahmad Maulidizen4
Abstract:
This article examines the economic implications of maritime disruptions from the perspective of the public sector rather than focusing on other research works where the emphasis was placed on their shipping and logistics perspective. The method is based on an analytical framework of stylized facts and identifies some key transmission mechanisms such as higher transport costs, slower delivery times, and higher insurance premiums, resulting in higher import prices, higher inflation, and policy responses. The findings indicate that marine chokepoint disruptions have characteristics similar to an economic shock that has a significant impact on the economy. This gives policymakers the understanding that they must plan their economies for the (potential) risks of maritime transportation routes.
Keywords:
Bab el-Mandeb Strait, maritime disruptions, trade costs, fiscal vulnerability, inflation pass-through, and supply chain resilience
Full Text:
PDF