This paper analyses the impact of disintegration of an economic union on trade patterns. Our study focuses on South-eastern Europe, which was highly fragmented during the nineties because of the dissolution of the Council of Mutual Economic Assistance (CMEA) and of the Socialist Federal Republic...

The positive effect of a common currency on trade is empirically well-documented, but the reason of this effect remains unclear. In this paper, we argue that part of the currency union effect on trade is indirect. Currency unions foster foreign direct investment (FDI), which promotes trade due...