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Does a Common Currency Promote Countries’ Growth via Trade and Tourism?
Author(s) -
SantanaGallego María,
LedesmaRodríguez Francisco J.,
PérezRodríguez Jorge V.,
CortésJiménez Isabel
Publication year - 2010
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/j.1467-9701.2010.01305.x
Subject(s) - currency , economics , tourism , common currency , international economics , panel data , sample (material) , international trade , monetary economics , geography , chemistry , archaeology , chromatography , econometrics
The main aim of this study is to contribute to the debate on the effects of a common currency. In particular, the impact of a common currency on growth via trade and tourism is explored for a panel dataset which includes 179 countries as destination and 30 OECD countries as origin over the period 1995–2006. This research contributes to previous work in three ways: (i) tourism is included as an additional channel for a common currency to promote growth; (ii) the heterogeneity of countries is addressed by dividing the sample into three groups of countries by income; and (iii) up‐to‐date data including the case of the euro are considered. The results obtained suggest that a common currency strengthens economic growth by promoting not only international trade but also tourism.