Merchant ships, before the inauguration of the Suez Canal, used to travel between large parts of Asia and Europe by travelling around Africa. I feel this must have boosted the economies of many of the southern African countries.

The inauguration of the Suez Canal did away with that, and ships started travelling through the canal instead.

Are there any rigorous studies that try to estimate the effect of this on important macroeconomic variables of those countries such as imports, exports, GDP etc.


1 Answer 1


Suez canal was opened in 1869, when many macroeconomic variables were not tracked. Even if we can estimate with a good accuracy some variables such as GDP of a number of countries, other variables such as imports and exports are anothter kind of problem, so it is not surprising you did not find studies on the effect of the opening of Suez Canal.

Anyway, if you want to try to study its effects, you can make use of the "natural experiment" occurred between 1967 and 1975, when the Canal was closed. The paper "Distance, trade, and income — The 1967 to 1975 closing of the Suez canal as a natural experiment" published on the "Journal of Development Economics" by Feirer J. (https://www.sciencedirect.com/science/article/pii/S0304387821000821) should answer your question.


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