The nonlinear impact of currency unions on bilateral trade

Hajime Katayama and Mark Melatos

Economics Letters, 2011, vol. 112, issue 1, 94-96

Abstract: Most gravity model specifications assume that a currency union varies the level of bilateral trade between members by a constant proportion. We demonstrate that a common currency also alters the slope of the relationship between bilateral trade and member country GDPs.

Keywords: Currency; union; Gravity; model; Common; currency (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:112:y:2011:i:1:p:94-96

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