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Are There Differences Across Countries Regarding the Effect of Currency Unions on Trade? Evidence from EMU
Author(s) -
ARISTOTELOUS KYRIACOS
Publication year - 2006
Publication title -
jcms: journal of common market studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.54
H-Index - 90
eISSN - 1468-5965
pISSN - 0021-9886
DOI - 10.1111/j.1468-5965.2006.00612.x
Subject(s) - rest (music) , context (archaeology) , economics , international economics , gravity model of trade , currency , empirical evidence , international trade , monetary economics , geography , medicine , philosophy , archaeology , epistemology , cardiology
This article investigates the effect of EMU on the bilateral trade of each EMU country with the rest of the euro area using pooled data in the context of an augmented gravity model. Using the fixed effect in the pooled data, the empirical results indicate that EMU's effect on trade differs across euro area countries. For Belgium/Luxembourg, Finland, Germany, Ireland, the Netherlands, Portugal and Spain the effect is positive and statistically significant, whereas in the cases of Austria, France and Greece, it is negative and statistically significant. For Italy, EMU's effect on its trade with the rest of the euro area is positive but not statistically significant.