Enlarging the EMU to the East: What Effects on Trade?

Ansgar Belke () and Julia Christina Spies

No 3647, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: The purpose of this paper is to assess the implications of the Economic and Monetary Union (EMU) accession of eight Central and Eastern European Countries (CEECs) on their share in EMU-12 imports. Overcoming biases related to endogeneity, omitted variables and sample selection, our results indicate that the common currency has boosted intra-EMU imports by 7%. Under the assumption that the same relationship between the explanatory variables and imports will hold for EMU-CEEC trade, we are able to predict the future impact of the Euro. Our findings suggest that except for the least integrated countries, Poland, Latvia and Lithuania, all CEECs can expect increases in the EMU-12 import share.

Keywords: Central and Eastern European countries; Euro area enlargement; gravity model; panel estimation (search for similar items in EconPapers)
JEL-codes: F15 F41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-int, nep-mon, nep-opm and nep-tra
Date: 2008-08
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Working Paper: Enlarging the EMU to the east: What effects on trade? (2007)
Journal Article: Enlarging the EMU to the east: what effects on trade? (2008)
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