Rose Effect and the Euro: Is the Magic Gone?

Tomas Havranek

MPRA Paper from University Library of Munich, Germany

Abstract: This paper presents an updated meta-analysis of the effect of currency unions on trade, focusing on the Euro area. Using meta-regression methods such as funnel asymmetry test, evidence for strong publication bias is found. The estimated underlying effect for currency unions other than Eurozone reaches more than 60%. However, according to the meta-regression analysis, the Euro's trade promoting effect corrected for publication bias is insignificant. The Rose effect literature shows signs of the economics research cycle: reported t-statistic is a quadratic concave function of publication year. Explanatory meta-regression (robust fixed effects and random effects), that can explain about 70% of the heterogeneity in the literature, suggests that results published by some authors might consistently differ from the mainstream output and that study outcomes are systematically dependent on study design (usage of panel data, short- or long-run nature, number of countries in the dataset).

Keywords: Rose effect; Trade; Currency union; Euro; Meta-analysis; Publication bias (search for similar items in EconPapers)
JEL-codes: C42 F15 F33 (search for similar items in EconPapers)
Date: 2009-05-05, Revised 2009-11-07
New Economics Papers: this item is included in nep-eec and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Related works:
Journal Article: Rose effect and the euro: is the magic gone? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:18479

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