Zentrum für Europäische Wirtschaftsforschung (ZEW), Mannheim >
ZEW Discussion Papers >
Please use this identifier to cite or link to this item:
| || |
|Title:||Readdressing the trade effect of the Euro: Allowing for currency misalignment |
Kohler, Wilhelm K.
|Issue Date:||2010 |
|Series/Report no.:||ZEW Discussion Papers 10-023|
|Abstract:||We know that euro-area member countries have absorbed asymmetric shocks in ways that are inconsistent with a common nominal anchor. Based on a reformulation of the gravity model that allows for such bilateral misalignment, we disentangle the conventional trade cost channel and trade effects deriving from 'implicit currency misalignment'. Econometric estimation reveals that the currency misalignment channel exerts a significant trade effect on bilateral exports. We retrieve country specific estimates of the euro effect on trade based on misalignment. This reveals asymmetric trade effects and heterogeneous outlooks across countries for the costs and benefits from adopting the euro.|
purchasing power parity
|Document Type:||Working Paper|
|Appears in Collections:||Publikationen von Forscherinnen und Forschern des ZEW|
ZEW Discussion Papers
Download bibliographical data as:
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.