Estimating the Impact of Currency Unions on Trade Using a Dynamic Gravity Framework

Douglas Campbell

MPRA Paper from University Library of Munich, Germany

Abstract: Does leaving a currency union reduce international trade? This paper reexamines time series estimates of currency unions on trade from a historical perspective using a dynamic gravity equation and by conducting in-depth case studies of currency union breakups. The early large estimates are sensitive to dynamic specifications, and were driven by omitted variables, as many breakups were caused by warfare, communist takeovers, coup d'etats and other major geopolitical events. The methodology has general applicability for the use of gravity equations in policy analysis, and yields an imprecise point estimate of currency unions on trade close to one percent.

Keywords: Currency Unions; Trade; Dynamic Gravity; Decolonization (search for similar items in EconPapers)
JEL-codes: F10 F33 F54 (search for similar items in EconPapers)
Date: 2012-02-26
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/37091/1/MPRA_paper_37091.pdf original version (application/pdf)

Related works:
Working Paper: Estimating the Impact of Currency Unions on Trade Using a Dynamic Gravity Framework (2012)
Working Paper: Estimating the impact of currency unions on trade using a dynamic gravity framework (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:37091

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().