What does European institutional integration tell us about trade integration?
AbstractThe start of the European Economic and Monetary Union (EMU) has spurred a new interest in the debate on the effects of monetary unions on regional economic integration. This literature either investigates past episodes of monetary unions or attempts to gauge any effect with a few years of EMU data. This paper takes instead a more general perspective - it investigates the link between economic integration and the overall institutional process of regional integration in Europe – of which monetary integration was only one step – over the last 50 years. We look mainly at two dimensions - European institutional integration – whose main steps were the customs union in 1968, the single market in 1993 and the single currency in 1999 – and intra-European trade. We pay special attention to the successive EU enlargements which took place in 1973, 1981, 1986, and 1995. Different facets of openness and trade linkages are presented. After looking at some descriptive links between institutional and trade integration, the paper uses some causality tests to assess the direction of causality and magnitude of impact. The evidence provided is consistent with the idea that the interaction between regional institutional and trade integration before monetary union matters. Such interaction runs in both directions, although the link from institutional to trade integration dominates. Many open questions remain, however.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by European Central Bank in its series Occasional Paper Series with number 40.
Length: 44 pages
Date of creation: Dec 2005
Date of revision:
Contact details of provider:
Postal: Postfach 16 03 19, Frankfurt am Main, Germany
Phone: +49 69 1344 0
Fax: +49 69 1344 6000
Web page: http://www.ecb.europa.eu/home/html/index.en.html
More information through EDIRC
Postal: Press and Information Division, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany
Find related papers by JEL classification:
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
- F15 - International Economics - - Trade - - - Economic Integration
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
This paper has been announced in the following NEP Reports:
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.:
- Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
- Jeffrey A. Frankel & Andrew K. Rose, 1996.
"The Endogeneity of the Optimum Currency Area Criteria,"
NBER Working Papers
5700, National Bureau of Economic Research, Inc.
- Frankel, Jeffrey A & Rose, Andrew K, 1998. "The Endogeneity of the Optimum Currency Area Criteria," Economic Journal, Royal Economic Society, vol. 108(449), pages 1009-25, July.
- Frankel, Jeffrey A & Rose, Andrew K, 1996. "The Endogeneity of the Optimum Currency Area Criteria," CEPR Discussion Papers 1473, C.E.P.R. Discussion Papers.
- Andrew K. Rose, 2001. "Currency unions and trade: the effect is large," Economic Policy, CEPR & CES & MSH, vol. 16(33), pages 449-461, October.
- Andrew K. Rose, 2000. "One money, one market: the effect of common currencies on trade," Economic Policy, CEPR & CES & MSH, vol. 15(30), pages 7-46, 04.
- Kenen, Peter B & Rodrik, Dani, 1986. "Measuring and Analyzing the Effects of Short-term Volatility in Real Exchange Rates," The Review of Economics and Statistics, MIT Press, vol. 68(2), pages 311-15, May.
- Mongelli, Francesco Paolo, 2002.
"ìNew" Views on the Optimum Currency Area Theory: What is EMU Telling US?,"
Royal Economic Society Annual Conference 2002
140, Royal Economic Society.
- Mongelli, Francesco Paolo, 2002. ""New" views on the optimum currency area theory: what is EMU telling us?," Working Paper Series 0138, European Central Bank.
- Francesco Paolo Mongelli, 2005. "What is European Economic and Monetary Union Telling us About the Properties of Optimum Currency Areas?," Journal of Common Market Studies, Wiley Blackwell, vol. 43(3), pages 607-635, 09.
- Mongelli, Francesco Paolo & Vega, Juan Luis, 2006. "What effects is EMU having on the euro area and its member countries? An overview," Working Paper Series 0599, European Central Bank.
- Jean Pisani-Ferry & J�r�mie Cohen-Setton, 2008.
"Asia-Europe: the third link,"
European Economy - Economic Papers
352, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Helmut Herwartz & Henning Weber, 2008.
"When, How Fast and by How Much do Trade Costs change in the Euro Area?,"
SFB 649 Discussion Papers
SFB649DP2008-065, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
- Herwartz, Helmut & Weber, Henning, 2008. "When, how fast and by how much do trade costs change in the euro area?," Economics Working Papers 2008,17, Christian-Albrechts-University of Kiel, Department of Economics.
- Weber, Henning & Herwartz, Helmut, 2008. "When, how fast and by how much do trade costs change in the euro area?," Discussion Papers 2008/18, Free University Berlin, School of Business & Economics.
- Frank Dierick & Fatima Pires & Martin Scheicher & Kai Gereon Spitzer, 2005. "The New Basel Capital Framework and its implementation in the European Union," Occasional Paper Series 42, European Central Bank.
- De Grauwe, Paul & Mongelli, Francesco Paolo, 2005.
"Endogeneities of optimum currency areas: what brings countries sharing a single currency closer together?,"
Working Paper Series
0468, European Central Bank.
- Paul de Grauwe & Francesco Paolo Mongelli, 2005. "Endogeneities of Optimum Currency Areas: What brings Countries Sharing a Single Currency Closer together?," Working Papers de Economia (Economics Working Papers) 29, Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro.
- De Grauwe, Paul & Mongelli, F, 2005. "Endogeneities of optimal currency areas: What brings countries sharing a single currency closer together?," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/120944, Katholieke Universiteit Leuven.
- Vinokurov, Evgeny, 2009.
"Systema Indikatorov Evraziyskoy Integracii
[The System of Indicators of Eurasian Integration]," MPRA Paper 20914, University Library of Munich, Germany.
- Berger, Helge & Nitsch, Volker, 2005.
"Zooming Out: The Trade Effect of the EURO in Historical Perspective,"
2005/5, Free University Berlin, School of Business & Economics.
- Berger, Helge & Nitsch, Volker, 2008. "Zooming out: The trade effect of the euro in historical perspective," Journal of International Money and Finance, Elsevier, vol. 27(8), pages 1244-1260, December.
- Helge Berger & Volker Nitsch, 2005. "Zooming Out: The Trade Effect of the Euro in Historical Perspective," CESifo Working Paper Series 1435, CESifo Group Munich.
- König, Jörg & Ohr, Renate, 2012. "Homogeneous groups within a heterogeneous community: Evidence from an index measuring European economic integration," Center for European, Governance and Economic Development Research Discussion Papers 138, University of Goettingen, Department of Economics.
- König, Jörg & Ohr, Renate, 2012. "Messung ökonomischer Integration in der Europäischen Union: Entwicklung eines EU-Integrationsindexes," Center for European, Governance and Economic Development Research Discussion Papers 135, University of Goettingen, Department of Economics.
- Francesco Paolo Mongelli, 2008. "European Economic and Monetary Integration, and the Optimum Currency Area Theory," European Economy - Economic Papers 302, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Matthieu Bussière & Jarko Fidrmuc & Bernd Schnatz, 2007.
"Trade Integration of Central and Eastern European Countries: Lessons from a Gravity Model,"
105, Oesterreichische Nationalbank (Austrian Central Bank).
- Bussière, Matthieu & Fidrmuc, Jarko & Schnatz, Bernd, 2005. "Trade integration of Central and Eastern European countries: lessons from a gravity model," Working Paper Series 0545, European Central Bank.
- Vinokurov, Evgeny, 2010. "The System of Indicators of Eurasian Integration," MPRA Paper 22227, University Library of Munich, Germany.
- Adalbert Winkler & Roland Beck, 2006. "Macroeconomic and financial stability challenges for acceding and candidate countries," Occasional Paper Series 48, European Central Bank.
- Triandafil, Cristina Maria, 2011. "The Analysis Of The Convergence Criteria. Empirical Perspective In The Context Of The Sustainable Character Highlight," Working Papers of National Institute of Economic Research 111205, National Institute of Economic Research.
- Cafiso, Gianluca, 2008. "Euro's influence upon trade: Rose effect versus border effect," Working Paper Series 0941, European Central Bank.
- Roland Rieder, 2006. "Playing Dominoes in Europe: An Empirical Analysis of the Domino Theory for the EU, 1962-2004," IHEID Working Papers 11-2006, Economics Section, The Graduate Institute of International Studies, revised Jun 2006.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Official Publications).
If references are entirely missing, you can add them using this form.