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Intra and offshore trade in the euro zone and trade imbalances

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  • Jong-Hee Kim
  • Joocheol Kim

Abstract

By examining trade imbalances using 40 countries including Euro-zone countries, we show that the trade imbalance has been exacerbated after joining the Euro zone for the member countries, and the intra trade has greater impact on the imbalance than the offshore trade. For the trade between northern countries and southern countries in the Euro-zone, the imbalance worsens after joining the Euro zone. The bilateral gaps in the government expenditure and the unemployment have significant effect. Excessive government expenditure leads to the increase in the trade imbalance.

Suggested Citation

  • Jong-Hee Kim & Joocheol Kim, 2014. "Intra and offshore trade in the euro zone and trade imbalances," Applied Economics Letters, Taylor & Francis Journals, vol. 21(15), pages 1060-1064, October.
    • Handle: RePEc:taf:apeclt:v:21:y:2014:i:15:p:1060-1064
    DOI: 10.1080/13504851.2014.907475
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    References listed on IDEAS

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