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...

A gravity model is used to assess the separate effects of exchange rate volatility and currency unions on international trade. The panel data, bilateral observations for five years during 1970-90 covering 186 countries, includes 300+ observations in which both countries use the same currency. I...

Feedback mechanisms are the key to sequencing when it comes to regional integration; can mean that today's policy or institution alters the political-economy landscape in a way that makes it politically optimal for future governments to take further steps toward integration - even when these...

The main objective of the following article is to present the key findings of the existent research in the field of the influence the introduction of the euro had on the trade of the member states of the Economic and Monetary Union (EMU). The intention of this article is also to inspire further...

This paper brings together several strands of the literature on the endogenous effects of monetary integration: i.e., whether sharing a single currency may set in motion forces bringing countries closer together. The start of EMU has spurred a new interest in this debate. Four areas are...

This paper assesses the Euro’s influence upon European trade by estimating two different indicators. The first is the so-called “Rose Effect”, while the second is the “Border Effect”. The former measures how much a country within a currency union trades more with its partners than with...

This paper estimates a gravity model of trade to evaluate the trade effects of the Euro on sectoral trade within the Euro Zone, the CFA Franc Zone and between the Eurozone and the CFA Franc Zone, when CFA countries acquired fixed rates against the non-francophone Eurozone members. The formation...

This paper assesses the Euro's influence upon European trade by estimating two different indicators. The first is the so-called quot;Rose Effectquot;, while the second is the quot;Border Effectquot;. The former measures how much a country within a currency union trades more with its partners...

This paper examines the factors affecting bilateral Foreign Direct Investment (FDI) stocks from 14 high income countries to 31 OECD countries over the period 1995-2015. We specifically emphasise the effect of regional trade agreements such as the European Union (EU) and the North American Free...

Estimating the currency union effect on trade has been a contentious topic, with a wide range of estimates on the true size of gains. One fundamental issue underlying many estimates is the lack of a accurate control group against which to compare outcomes, making it hard to understand the degree...