Trade effects of monetary integration in large, mature economies: a primer on the European Monetary Union

Lucio Vinhas de Souza

No 1137, Kiel Working Papers from Kiel Institute for the World Economy

Abstract: The aim of this paper is to estimate the trade gains arising from the constitution ofa currency union for a set of economically large, developed nations who create a monetary union as a deliberate economic policy action: namely, for the members of the euro area. With a 1980-2001 sample, no consistent significant trade effects from the 1999 creation of EMU are found, using dummies for the 1999-2001 period. Treating EMU not as a single event but as a part of a long-term integration process, and representing it by a series of continuous cross-country interest differentials, the evidence seems to be stronger, but it does not seem to be conditional on any single, specific exchange rate arrangement.

Keywords: Currency Unions; EU; EMU; panel model; gravity equation (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1137

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