Objective: The objective of the article is to determine which exchange rate regime provides higher bilateral trade: fixed rate or currency union. Research Design & Methods: An index was designed based on variables commonly recognised as those that might affect the value of bilateral trade and...

We assess to which degree an international transfer mechanism can enhance consumption risk sharing as well as allocative efficiency and apply our results to the implicit transfers generated by a potential European unemployment benefit scheme (EUBS). Specifically, we first develop a simple model...