Trade Volume Effects of the Euro: Aggregate and Sector Estimates
Harry Flam and
Håkan Nordström ()
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Håkan Nordström: Kommerskollegium, Postal: Kommerskollegium, Box 6803, 113 86 Stockholm
No 746, Seminar Papers from Stockholm University, Institute for International Economic Studies
The gravity model is used to estimate the trade volume effects of the creation of the European currency union. The euro is estimated to have raised the level of aggregate trade between euro countries in 1998-2002 compared to 1989-1997 by 15 per cent and the level of trade with outside countries by 8 per cent. The effect is clearly increasing over time. Estimates for one-digit SITC sectors yield a concentration of effects to highly processed manufactures, indicating that the spillover is caused by increasing vertical specialization across countries.
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JEL-codes: F10 (search for similar items in EconPapers)
Pages: 35 pages
New Economics Papers: this item is included in nep-cba, nep-eec and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iiessp:0746
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