Rose Effect: How Far Can it be Argued that the Euro Increased Trade?

Puiu Cristina ()
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Puiu Cristina: „Alexandru Ioan Cuza” University of Ia?i, Doctoral School of Economics

Ovidius University Annals, Economic Sciences Series, 2011, vol. XI, issue 1, 1779-1784

Abstract: Current imbalances in the euro area made it necessary to identify the benefits of a single currency in order to sustain the viability of it. This paper aims to review existing literature on the endogenous effects of monetary integration: whether sharing a single currency may bring countries closer together through an increase in trade. The first part is a review of significant paper in the vast literature on the endogeneity of optimum currency area theory that focuses on the main criterion that is subject of this hypothesis. The second part considers empirical literature on the effects of monetary integration on trade based on evidences provided by the euro area experience. The main conclusion is that the hypothesis attracted a large number of studies and, although they provide heterogeneous results caused by using different methodologies, they all indicate a positive effect.

Keywords: optimum currency areas; endogeneity; euro; Rose Effect (search for similar items in EconPapers)
JEL-codes: E42 F15 F3 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ovi:oviste:v:11:y:2011:i:1:p:1779-1784

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