Euro and Trade Flows in Central Europe
AbstractIn this paper we estimate the trade effects of the euro adoption in Central European countries using a modified gravity model. In particular, we analyze the ex post implications of accession of Slovenia and Slovakia to the Eurozone. We employ a gravity model that controls for an extended set of trade theory and policy variables. Trade theory variables include both the country size and factor proportion variables. Trade policy variables include the membership in GATT/WTO, CEFTA, OECD, EU and Europe Agreements. The gravity model is estimated using the panel data approach on a sample of CEE countries trading with the rest of the world during the period 1992-2009 using the fixed effects, random effects and Hausman-Taylor estimators. It seems that elimination of exchange rate volatility resulted in trade expansion for the CEE countries but the accession to the Eurozone did not have any significant effects on exports of Slovakia and Slovenia.
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Bibliographic InfoArticle provided by Wydawnictwo Naukowe Uniwersytetu Mikolaja Kopernika in its journal Equilibrium. Quarterly Journal of Economics and Economic Policy.
Volume (Year): 7, Issue 3 (2012)
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Central Europe; exports; euro; volume of trade;
Find related papers by JEL classification:
- F1 - International Economics - - Trade
- F15 - International Economics - - Trade - - - Economic Integration
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
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