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The Euro's effect on trade: An analysis of “old" and “new" EMU members

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  • Isaac Mensah

Abstract

This paper provides new empirical evidence of the “euro effect” on bilateral trade by allowing for a heterogeneous impact on "new" and “old” EMU members. By applying a Poisson estimator and focusing on a sample of 38 countries, our results show a statistically insignificant euro's effect on bilateral exports. However, disaggregating this effect, we report a relatively large euro's effect on bilateral trade for the "new" EMU countries. We also and no evidence of trade diversion, thus corroborating existing evidence. These results are robust to a number of sensitivity checks and, especially, to the use of a larger sample of countries.

Suggested Citation

  • Isaac Mensah, 2017. "The Euro's effect on trade: An analysis of “old" and “new" EMU members," FIW Working Paper series 179, FIW.
    • Handle: RePEc:wsr:wpaper:y:2017:i:179
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    More about this item

    Keywords

    Gravity model; Bilateral exports; Euro; Poisson estimator;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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