EMU effect on Trade: What’s in it for the UK?

Guillermo Ordoñez, Alejandro Micco () and Ernesto Stein
Authors registered in the RePEc Author Service: Guillermo L. Ordonez

No 324, Econometric Society 2004 Latin American Meetings from Econometric Society

Abstract: In this paper we estimate the early effect of the European Monetary Union (EMU) on trade and its possible effects on the UK. We use a panel data set that includes the most recent information on bilateral trade for 22 developed countries from 1992 through 2001. After 1999, 12 European countries formally entered into a currency union. Controlling for a host of other factors, we find that a pair of countries that joined the EMU experiences an increase in trade around 14 percent. Furthermore, we found that EMU increases trade not only among members, but also with non-members. Focusing on the UK, our results suggest that if Britain had joined the EMU its trade would have been 7 percent larger in 2001, an additional 15 billion US dollars of 1995.

Keywords: monetary agreements; trade (search for similar items in EconPapers)
JEL-codes: Z0 (search for similar items in EconPapers)
Date: 2004-08-11
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Persistent link: https://EconPapers.repec.org/RePEc:ecm:latm04:324

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