Bi- and Unilateral trade effects of joining the Euro

Mario Larch, Joschka Wanner and Yoto Yotov

Economics Letters, 2018, vol. 171, issue C, 230-234

Abstract: We propose a simple theoretically consistent adjustment for structural gravity estimations of the EMU impact on international trade. Our methods result in two contributions to the related literature. First, we show that proper control for intra-national trade flows leads to larger, positive, and statistically significant bilateral EMU effects. The intuition is that joining the EMU promotes trade among member countries at the expense of trade diversion from domestic sales. Second, the introduction of intra-national trade flows enables us to identify Unilateral effects of joining the Euro between members and non-member countries. The unilateral effects are also positive, sizable and statistically significant.

Keywords: Currency unions; Euro effects; EMU; Unilateral EMU effect; Structural gravity models (search for similar items in EconPapers)
JEL-codes: F14 F15 F33 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176518303082
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:171:y:2018:i:c:p:230-234

DOI: 10.1016/j.econlet.2018.08.001

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().