Estimating the Euro Effects on Trade with Propensity Score Matching *

Pandej Chintrakarn

Review of International Economics, 2008, vol. 16, issue 1, pages 186-198

Abstract: We investigate the effect of the euro on trade among EMU members. Using various semi-nonparametric methods based on matching, we find that the euro has a statistical and economic impact on trade. The results show that two countries sharing the euro currency trade somewhere between 9% and 14% more than other country-pairs. In addition, we find no evidence of trade diversion due to the euro. Copyright © 2008 The Author; Journal compilation © 2008 Blackwell Publishing Ltd.

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