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Trade effects of monetary agreements: Evidence for OECD countries

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  • Gil-Pareja, Salvador
  • Llorca-Vivero, Rafael
  • Martínez-Serrano, José Antonio

Abstract

This paper analyses the effects of monetary agreements on trade flows using a sample of 25 OECD countries over the period 1950-2004. We find that these agreements have boosted intra-bloc trade. This result especially applies to the case of the euro. More importantly, in contrast to regional trade agreements, all monetary agreements analysed show evidence of trade-creating effects with third countries. Finally, only the euro shows a symmetric impact for the trade-creating effect with non-members, that is, using the euro promotes both the Eurozone's exports and its imports to non-Eurozone markets to a similar extent.

Suggested Citation

  • Gil-Pareja, Salvador & Llorca-Vivero, Rafael & Martínez-Serrano, José Antonio, 2008. "Trade effects of monetary agreements: Evidence for OECD countries," European Economic Review, Elsevier, vol. 52(4), pages 733-755, May.
    • Handle: RePEc:eee:eecrev:v:52:y:2008:i:4:p:733-755
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