Measuring the Trade Effects of EMU

August 1, 2004

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Format: Chicago

Hamid Faruqee. Measuring the Trade Effects of EMU, (USA: International Monetary Fund, 2004) accessed December 24, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the impact of European Economic and Monetary Union (EMU) on trade within the euro area. Using panel data for 22 industrial countries, the analysis estimates the effect of the euro's arrival on area-wide trade compared to bilateral trade flows between other industrial countries. Controlling for other influences according to the "gravity" model of trade, the panel analysis employs cointegration techniques to obtain reliable point estimates of EMU trade effects. Cross-country differences with respect to EMU trade gains and underlying factors accounting for these differences are also further explored.

Subject: Currencies, Economic integration, Exchange rates, Foreign exchange, International trade, Labor, Labor unions, Monetary unions, Money, Trade balance

Keywords: Aggregate EMU variable, -area trade, Bilateral trade, Currencies, Currency unions, EMU membership, EMU trade effect, EMU trade impact, Europe, Exchange rates, Gravity model, Industry trade share, Labor unions, Monetary union, Monetary unions, Trade, Trade balance, Trade gain, WP

Publication Details

Pages:

29
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2004/154
Stock No:

WPIEA1542004
ISBN:

9781451857269
ISSN:

1018-5941

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