NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Currency Unions and Trade: A Post-EMU Mea Culpa

Reuven Glick, Andrew K. Rose

NBER Working Paper No. 21535
Issued in September 2015
NBER Program(s):The International Finance and Macroeconomics Program, The International Trade and Investment Program

In our European Economic Review (2002) paper, we used pre-1998 data on countries participating in and leaving currency unions to estimate the effect of currency unions on trade using (then-) conventional gravity models. In this paper, we use a variety of empirical gravity models to estimate the currency union effect on trade and exports, using recent data which includes the European Economic and Monetary Union (EMU). We have three findings. First, our assumption of symmetry between the effects of entering and leaving a currency union seems reasonable in the data but is uninteresting. Second, EMU typically has a smaller trade effect than other currency unions; it has a mildly stimulating effect at best. Third and most importantly, estimates of the currency union effect on trade are sensitive to the exact econometric methodology; the lack of consistent and robust evidence undermines confidence in our ability to reliably estimate the effect of currency union on trade.

download in pdf format
   (861 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w21535

Users who downloaded this paper also downloaded* these:
Frankel and Rose w5700 The Endogeneity of the Optimum Currency Area Criteria
Glick and Rose w8396 Does a Currency Union Affect Trade? The Time Series Evidence
Rose w21537 Like Me, Buy Me: The Effect of Soft Power on Exports
Frankel w14542 The Estimated Effects of the Euro on Trade: Why Are They Below Historical Effects of Monetary Unions Among Smaller Countries?
Mukand and Rodrik w21540 The Political Economy of Liberal Democracy
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us