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On the Bi- and Uni-lateral Trade Effects of EMU Membership

Author

Listed:
  • Larch, Mario

    () (University of Bayreuth)

  • Wanner, Joschka

    () (University of Bayreuth)

  • Yotov, Yoto

    () (Drexel University)

Abstract

We propose a simple theoretically consistent adjustment for structural gravity estimations of the EMU impact on international trade. Our methods result in two contributions to the related literature. First, we show that proper control for intra-national trade flows leads to larger, positive, and statistically significant bilateral EMU effects. Second, the introduction of intra-national trade flows enables us to identify unilateral EMU effects on trade between members and non-member countries. The unilateral effects are also positive, sizable and statistically significant.

Suggested Citation

  • Larch, Mario & Wanner, Joschka & Yotov, Yoto, 2018. "On the Bi- and Uni-lateral Trade Effects of EMU Membership," School of Economics Working Paper Series 2018-4, LeBow College of Business, Drexel University.
  • Handle: RePEc:ris:drxlwp:2018_004
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    More about this item

    Keywords

    Currency Unions; Euro Effects; EMU; Unilateral EMU Effect; Structural Gravity Models;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions

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