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A Meta‐Analysis of the Effect of Common Currencies on International Trade

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  • Andrew K. Rose
  • T. D. Stanley

Abstract

. Thirty‐four recent studies have investigated the effect of currency union on trade, resulting in 754 point estimates of this effect. This paper uses meta‐analysis to combine, explain, and to summarize these disparate estimates of common currency trade effects. The hypothesis that there is no effect of currency union on trade is easily and robustly rejected at standard significance levels. Combining these estimates implies that a currency union increases bilateral trade by between 30 and 90%. Although there is evidence of publication selection, there is also evidence of a genuine positive trade effect beyond publication bias.

Suggested Citation

  • Andrew K. Rose & T. D. Stanley, 2005. "A Meta‐Analysis of the Effect of Common Currencies on International Trade," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 347-365, July.
  • Handle: RePEc:bla:jecsur:v:19:y:2005:i:3:p:347-365
    DOI: 10.1111/j.0950-0804.2005.00251.x
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    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems

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