Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86098
Authors: 
Bun, Maurice J.G.
Klaassen, Franc J.G.M.
Year of Publication: 
2002
Series/Report no.: 
Tinbergen Institute Discussion Paper 02-108/2
Abstract: 
A major economic reason for the introduction of the euro was its supposedly positive effect on intra-EMU trade. Existing studies examine this suspicion indirectly using non-EMU data and report ambiguous results. We estimate the euro-effect directly from data that include EMU observations. Using a dynamic panel model for annual bilateral exports, we find that the euro has significantly increased trade, with an effect of 4% in the first year and cumulating to around 40% in the long-run. These estimates can be useful in the debates on whether to join the euro in countries such as the U.K.
Subjects: 
Currency union
dynamic panel data model
EMU
exports
imperfect substitutes model.
JEL: 
C23
F15
F33
Document Type: 
Working Paper

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