Currency union entries and trade
Recent research suggests that adopting a common currency increases bilateral trade. In this paper, I explore experiences of currency union entry in the post-war period and find no effect on trade. Previous results derived from a large panel data set (covering more than 200 countries from 1948 through 1997) appear to depend crucially on the assumption of symmetry between currency union exits and entries: While countries leaving a currency union experience significant declines in trade, currency union entry appears to have no measurable effect on trade. Also, in a detailed analysis of the enlargement of the CFA franc zone, I find no consistent results on changes in the pattern of trade.
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- Alejandro Micco & Ernesto H. Stein & Guillermo Luis Ordoñez, 2003.
"The Currency Union Effect on Trade: Early Evidence from EMU,"
IDB Publications (Working Papers)
6511, Inter-American Development Bank.
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- Alejandro Micco & Ernesto H. Stein & Guillermo Luis Ordoñez, 2003. "The Currency Union Effect on Trade: Early Evidence from EMU," Research Department Publications 4339, Inter-American Development Bank, Research Department.
- Berger, Helge & Nitsch, Volker, 2008.
"Zooming out: The trade effect of the euro in historical perspective,"
Journal of International Money and Finance,
Elsevier, vol. 27(8), pages 1244-1260, December.
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- Thom, Rodney & Walsh, Brendan, 2002. "The effect of a currency union on trade: Lessons from the Irish experience," European Economic Review, Elsevier, vol. 46(6), pages 1111-1123, June.
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