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Currency union entries and trade

Volker Nitsch

No 2005/9, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: Recent research suggests that adopting a common currency increases bilateral trade. In this paper, I explore experiences of currency union entry in the post-war period and find no effect on trade. Previous results derived from a large panel data set (covering more than 200 countries from 1948 through 1997) appear to depend crucially on the assumption of symmetry between currency union exits and entries: While countries leaving a currency union experience significant declines in trade, currency union entry appears to have no measurable effect on trade. Also, in a detailed analysis of the enlargement of the CFA franc zone, I find no consistent results on changes in the pattern of trade.

Keywords: accession; adoption; common currency; monetary integration (search for similar items in EconPapers)
JEL-codes: F02 F14 F15 F33 F36 (search for similar items in EconPapers)
Date: 2005
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https://www.econstor.eu/bitstream/10419/28033/1/51226404X.PDF (application/pdf)

Related works:
Working Paper: Currency Union Entries and Trade (2005)
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