In this paper we have examined the cointegration with German aggregates of real and nominal aggregates and prices in transition-economy candidates for EU membership and with those of countries that have recently joined the EU and with market-economy candidates for EU membership. Based on rolling...

We estimate a three-region (DE-REA-RoW) structural macroeconomic model, and we provide a counterfactual on how nominal exchange rate flexibility would have affected the German trade balance (TB) by simulating the shocks of the estimated model under a counterfactual flexible exchange rate regime....

How do trade costs affect international trade? This paper offers a new approach. We rely on a flexible gravity equation that predicts variable trade cost elasticities, both across and within country pairs. We apply this framework to the effect of currency unions on international trade. While we...