Working Paper

Currency Unions and Regional Trade Agreements: EMU and EU Effects on Trade

Abstract: The effects of the European Economic and Monetary Union (EMU) and European Union (EU) on trade are separately estimated using an empirical gravity model. Employing a panel approach with both time-varying country and dyadic fixed effects on a large span of data (across both countries and time), it is found that EMU and EU each significantly boosted exports. EMU expanded European trade by 40% for the original members, while the EU increased trade by almost 70%. Newer members have experienced even higher trade as a result of joining the EU, but more time is necessary to see the effects of their joining EMU.

JEL Classification: F15; F33;

https://doi.org/10.24148/wp2016-27

Bibliographic Information

Provider: Federal Reserve Bank of San Francisco

Part of Series: Working Paper Series

Publication Date: 2016-10-28

Number: 2016-27

Pages: 24 pages

Note: Draft: October 6, 2016. Data available under "Currency Unions and Trade: A Post-EMU Reassessment" at: http://faculty.haas.berkeley.edu/arose/RecRes.htm#Software