The effect of a common currency on trade: Ireland before and after the Sterling link

Rodney Thom and Brendan M. Walsh

No 200110, Working Papers from School of Economics, University College Dublin

Abstract: This paper uses the introduction of an exchange rate between Ireland and the UK in 1979 as a natural experiment to shed light on the effects of a common currency on the volume of international trade. No evidence is found from time series or panel regressions that the change of exchange rate regime had a significant effect on the pattern of Irish trade. This finding casts doubt on the belief that the European Economic and Monetary Union will have a major effect on the pattern of trade between participating countries.

Keywords: Monetary unions; Foreign exchange rates; International trade (search for similar items in EconPapers)
Date: 2001-05
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Citations: View citations in EconPapers (18)

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http://hdl.handle.net/10197/712 First version, 2001 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:200110

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