Has the euro increased trade?
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| Publication date | 2002 |
| Series | Tinbergen Institute Discussion Paper, 2002-108/2 |
| Number of pages | 18 |
| Publisher | Amsterdam: Tinbergen Institute |
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| Abstract |
A major economic reason for the introduction of the euro was its supposedly positive effect on intra-EMU trade. Existing studies examine this suspicion indirectly using non-EMU data and report ambiguous results. We estimate the euro-effect directly from data that include EMU observations. Using a dynamic panel model for annual bilateral exports, we find that the euro has significantly increased trade, with an effect of 4% in the first year and cumulating to around 40% in the long-run. These estimates can be useful in the debates on whether to join the euro in countries such as the U.K. |
| Document type | Working paper |
| Language | English |
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