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Trade effects of monetary agreements: Evidence for OECD countries

  • Gil-Pareja, Salvador
  • Llorca-Vivero, Rafael
  • Martínez-Serrano, José Antonio

This paper analyses the effects of monetary agreements on trade flows using a sample of 25 OECD countries over the period 1950-2004. We find that these agreements have boosted intra-bloc trade. This result especially applies to the case of the euro. More importantly, in contrast to regional trade agreements, all monetary agreements analysed show evidence of trade-creating effects with third countries. Finally, only the euro shows a symmetric impact for the trade-creating effect with non-members, that is, using the euro promotes both the Eurozone's exports and its imports to non-Eurozone markets to a similar extent.

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Article provided by Elsevier in its journal European Economic Review.

Volume (Year): 52 (2008)
Issue (Month): 4 (May)
Pages: 733-755

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Handle: RePEc:eee:eecrev:v:52:y:2008:i:4:p:733-755
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