The Euro's effect on trade: An analysis of “old" and “new" EMU members

Isaac Mensah

No 179, FIW Working Paper series from FIW

Abstract: This paper provides new empirical evidence of the “euro effect” on bilateral trade by allowing for a heterogeneous impact on "new" and “old” EMU members. By applying a Poisson estimator and focusing on a sample of 38 countries, our results show a statistically insignificant euro's effect on bilateral exports. However, disaggregating this effect, we report a relatively large euro's effect on bilateral trade for the "new" EMU countries. We also and no evidence of trade diversion, thus corroborating existing evidence. These results are robust to a number of sensitivity checks and, especially, to the use of a larger sample of countries.

Keywords: Gravity model; Bilateral exports; Euro; Poisson estimator (search for similar items in EconPapers)
JEL-codes: C33 F14 F15 F33 F4 (search for similar items in EconPapers)
Pages: 30
Date: 2017-12
New Economics Papers: this item is included in nep-eec and nep-int
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