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Asymmetric Effect of Currency Union for Developing Countries

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Author Info
Ayako Saiki ()

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Abstract

The large effect of currency union on trade volume has been well documented by Rose (2000). However, the effect of currency union on trade balance has hardly been previously reported. In this study, the effect of currency union is found to differ substantially across imports and exports when a developing country trade with developed country that anchors the currency. To ensure that the asymmetric effect does not come from the specific nature of countries that have adopted a common currency or endogeneity of currency union, we test the same hypothesis using nominal exchange rate volatility and real exchange rate level. Copyright Springer Science + Business Media, Inc. 2005

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File URL: http://hdl.handle.net/10.1007/s11079-005-1023-1
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Publisher Info
Article provided by Springer in its journal Open Economies Review.

Volume (Year): 16 (2005)
Issue (Month): 3 (July)
Pages: 227-247
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Handle: RePEc:kap:openec:v:16:y:2005:i:3:p:227-247

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Related research
Keywords: currency union; gravity model;

References listed on IDEAS
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Cardamone, Paola, 2007. "A survey of the assessments of the effectiveness of Preferential Trade Agreements using gravity models," Working Papers 7282, TRADEAG - Agricultural Trade Agreements. [Downloadable!]
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