The EMU effect on trade: A re-assessment accounting for staggered treatment adoption

Carmen Diaz-Mora, Silviano Esteve-Pérez, Salvador Gil-Pareja and Fernando Ríos-Avila
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Fernando Ríos-Avila: Levy Economics Institute of Bard College.

No 2407, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: This paper estimates the EMU effect on trade accounting for heterogeneous effects across space and time. To that end, we use an extended two-way fixed effect estimator for staggered difference-in-differences within the structural gravity model. The average EMU impact on trade between members taking into account the heterogeneity of the treatment effect at the cohort-year level is positive (close to 20%) but very similar to that found using the standard two-way fixed effects estimator. However, the new approach allows us to analyze the EMU impact by cohorts and by periods from treatment, which reveals heterogeneity in the results and provides new insights into the study of the impact of EMU.

Keywords: Keywords: EMU; gravity equation; staggered difference-in-differences; heterogeneity (search for similar items in EconPapers)
JEL-codes: F13 F14 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-eec and nep-int
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