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Does a Currency Union Affect Trade? The Time Series Evidence

Опубликовано на портале: 23-12-2003
NBER Working Paper Series. 2001.  w8396.
Does leaving a currency union reduce international trade? We answer this question using a large annual panel data set covering 217 countries from 1948 through 1997. During this sample a large number of countries left currency unions; they experienced economically and statistically significant declines in bilateral trade, after accounting for other factors. Assuming symmetry, we estimate that a pair of countries that starts to use a common currency experiences a doubling in bilateral trade.

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