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Rose Effect and the Euro: The Magic is Gone

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Abstract

This paper presents an updated meta-analysis of the effect of currency unions on trade, focusing on the Euro area. Using meta-regression methods such as funnel asymmetry test, evidence for strong publication bias is found. The estimated underlying effect for non-Euro studies reaches about 50%. However, the Euro's trade promoting effect corrected for publication bias is insignificant. The Rose effect literature shows signs of the economics research cycle: reported t-statistic is a quadratic function of publication year. Explanatory meta-regression (robust fixed effects and random effects) suggests that some authors produce predictable results. Interestingly, proxies for authors' IT skills were also found significant.

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Bibliographic Info

Paper provided by Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies in its series Working Papers IES with number 2009/20.

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Length: 28 pages
Date of creation: Aug 2009
Date of revision: Aug 2009
Handle: RePEc:fau:wpaper:wp2009_20

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Keywords: Rose effect; Trade; Currency union; Euro; Meta-analysis; Publication bias;

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References

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Cited by:
  1. Iršová, Zuzana & Havránek, Tomáš, 2013. "Determinants of Horizontal Spillovers from FDI: Evidence from a Large Meta-Analysis," World Development, Elsevier, vol. 42(C), pages 1-15.
  2. Douglas Campbell, 2012. "Estimating the Impact of Currency Unions on Trade Using a Dynamic Gravity Framework," Working Papers 121, University of California, Davis, Department of Economics.
  3. Jayjit Roy, 2010. "On the Robustness of the Trade-Inducing Effects of Trade Agreements and Currency Unions," Working Papers 10-09, Department of Economics, Appalachian State University.

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