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The euro's trade effect

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Author Info
Richard E. Baldwin () (University of Geneva - Graduate Institute of International Studies (HEI), CH-1202 Geneva, Switzerland.)

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Abstract

This paper reviews reassesses the methodology and principal findings of the “Rose effect”, i.e. the trade effects of currency union, looking at both EMU and non-EMU currency unions. The consensus estimate suggests that the euro has already boosted intra-euro area trade by five to ten percent. The paper discusses a gamut of models that might explain the Rose effect in Europe and suggests a series of empirical test that could help identify the economic mechanisms involved. JEL Classification: F12; C33; E0.

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Publisher Info
Paper provided by European Central Bank in its series Working Paper Series with number 594.

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Length: 102 pages
Date of creation: Mar 2006
Date of revision:
Handle: RePEc:ecb:ecbwps:20060594

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Related research
Keywords: Rose effect; exchange rate volatility; monetary union; gravity model.;

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References listed on IDEAS
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