Document Type : Original Article
Author
Assistant Professor, University of Tehran, Email: e.rasoulinezhad@ut.ac.ir
Abstract
The agreement of Iran with an integrated bloc like the Shanghai Cooperation Organization or Eurasian Economic Union to boost energy trade is considered an efficient factor in improving the multilateralism and regionalism of the Iranian economy. However, the outbreak of COVID-19 has had caused serious and unprecedented consequences on globalization and regionalization. This research seeks to find out the relationship between COVID-19 and regional energy integration for two cases of South Asia and the Eurasian Economic Union (EEU). The panel data framework based on quarterly data over 2010Q1-2020Q2 is employed to estimate the coefficients of variables. The significant results reveal that the COVID-19 pandemic is a severe challenge for regional energy integration in these two unions. The integration of larger economies that are more developed and have a higher level of trade liberalization is disturbed by this pandemic. A policy implication based on the conclusions is that Iran may try to integrate regional energy with its neighbors and trading partners. However, to reduce the long-run negative impacts of the pandemic, Iran and its energy trade partners should plan to determine the types and magnitudes of adverse effects of the pandemic, regulating monetary and fiscal policies to encounter the negative influences. To the best of the author’s knowledge, despite some earlier researches on the effects of COVID-19 on macroeconomic variables in different countries and regions, there is no existing literature focusing on how the coronavirus affects economic integration. Therefore, this paper tries to fill in this literature gap.
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