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

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  • Andrew K. Rose

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

  • Andrew K. Rose, 2016. "Why Do Estimates of the EMU Effect On Trade Vary so Much?," NBER Working Papers 22678, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:22678
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    Cited by:

    1. repec:eee:jimfin:v:83:y:2018:i:c:p:75-92 is not listed on IDEAS
    2. Mark Mink & Jan Jacobs & Jakob de Haan, 2016. "Euro Area Imbalances," CESifo Working Paper Series 6291, CESifo Group Munich.
    3. Mariam Camarero & Estrella Gómez-Herrera & Cecilio Tamarit, 2018. "New Evidence on Trade and FDI: how Large is the Euro Effect?," Open Economies Review, Springer, vol. 29(2), pages 451-467, April.
    4. Mika, Alina & Zymek, Robert, 2018. "Friends without benefits? New EMU members and the “Euro Effect” on trade," Journal of International Money and Finance, Elsevier, vol. 83(C), pages 75-92.
    5. Salvador Gil-Pareja & Rafael Llorca-Vivero & José Antonio Martínez-Serrano, 2018. "The happy few: cross-country evidence of the euro effect on trade," Working Papers 1803, Department of Applied Economics II, Universidad de Valencia.
    6. repec:cnb:ocpubv:as17 is not listed on IDEAS
    7. Campbell, Douglas L. & Chentsov, Aleksandr, 2017. "Breaking Badly: The Currency Union Effect on Trade," MPRA Paper 79973, University Library of Munich, Germany.
    8. repec:eee:ecmode:v:69:y:2018:i:c:p:49-57 is not listed on IDEAS

    More about this item

    JEL classification:

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

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