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Monetary Integration in Europe in the Function of Fostering International Business

Srđan Šapić and Srđan Furtula

A chapter in Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Kotor, Montengero, 10-11 September 2015, 2015, pp 461-467 from IRENET - Society for Advancing Innovation and Research in Economy, Zagreb

Abstract: Through joining the European Economic and Monetary Union a heterogeneous influence of member states cannot be avoided but all countries follow the logic of the economic benefits of unification. Besides reducing transaction costs, greater transparency in prices and the elimination of the uncertainty of exchange rate fluctuations, there is a great impact of open borders on increasing trade between member states. Therefore in this article we will analyze the Andrew Rose effect which estimated that countries with same currency trade over three times as much with each other as countries with different currencies. Through objective and systematic analysis we well conclude that the positive effect of monetary integration on increasing of international trade should be carried out in absolute and relative terms.

Keywords: monetary integration; European Economic and Monetary Union; international trade; international business (search for similar items in EconPapers)
JEL-codes: F15 (search for similar items in EconPapers)
Date: 2015
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