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Why Do Estimates of the EMU Effect On Trade Vary so Much?

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  • Rose, Andrew

Abstract

Larger data sets, with more countries and a longer span of time, exhibit systematically larger effects of European monetary union on trade. I establish this stylized fact with meta-analysis and confirm it by estimating a plain-vanilla gravity model. I then explain this finding by examining systematic biases in “multilateral resistance to trade†manifest in time-varying country fixed effects; bias grows as the sample is truncated by dropping small poor countries.

Suggested Citation

  • Rose, Andrew, 2016. "Why Do Estimates of the EMU Effect On Trade Vary so Much?," CEPR Discussion Papers 11532, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:11532
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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