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Changes in Export Affinity after the Creation of the EMU

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  • Halevi Nadav

    () (Department of Economics, Hebrew University, Mt. Scopus, Jerusalem 91905, Israel)

Abstract

The creation of the EMU in 1999 gave its original eleven members additional advantages for intra-EMU trade, relative to other members of the EU and the rest of the world. Other things being equal, this should have resulted in greater export affinity within the Euro Zone. This paper constructs export affinity indices for the intra-regional exports of the EMU, for its exports to the then other members of the EU, and to the countries that joined the EU during this period, for 1997, a full year before the Euro, and for 2007. These are used to see whether the net effect on export affinity are as expected, or whether other forces affecting the growth and direction of world exports led to different results. It was found that though there was clear export affinity within the EMU in both years examined, and, of course, tremendous growth in total exports to all regions, export affinity fell rather than rose between the two years. As far as special affinity is concerned, other factors affecting the development of world exports cancelled the advantages both of EMU membership and of new membership in the EU. Similar net results were found for bi-lateral export affinity indices of the original EMU members.

Suggested Citation

  • Halevi Nadav, 2017. "Changes in Export Affinity after the Creation of the EMU," Global Economy Journal, De Gruyter, vol. 17(1), pages 1-7, March.
  • Handle: RePEc:bpj:glecon:v:17:y:2017:i:1:p:7:n:4
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    References listed on IDEAS

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    1. Alejandro Micco & Ernesto Stein & Guillermo Ordoñez, 2003. "The currency union effect on trade: early evidence from EMU," Economic Policy, CEPR;CES;MSH, vol. 18(37), pages 315-356, October.
    2. Andrew K. Rose & Eric van Wincoop, 2001. "National Money as a Barrier to International Trade: The Real Case for Currency Union," American Economic Review, American Economic Association, vol. 91(2), pages 386-390, May.
    3. Christos Papazoglou & Eric J. Pentecost & Helena Marques, 2006. "A Gravity Model Forecast of the Potential Trade Effects of EU Enlargement: Lessons from 2004 and Path-dependency in Integration," The World Economy, Wiley Blackwell, vol. 29(8), pages 1077-1089, August.
    4. Alejandro Micco & Ernesto H. Stein & Guillermo Luis Ordoñez, 2003. "The Currency Union Effect on Trade: Early Evidence from EMU," Research Department Publications 4339, Inter-American Development Bank, Research Department.
    5. Michaely Michael, 2014. "Regionalism in Trade: An Overview of the Last Half-Century," Global Economy Journal, De Gruyter, vol. 14(3-4), pages 1-10, October.
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    Keywords

    export shares; export affinity; EMU;

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