Chapter

The Effect of Common Currencies on International Trade: A Meta-Analysis

Andrew K. Rose

in Monetary Unions and Hard Pegs

Published in print March 2004 | ISBN: 9780199271405
Published online August 2004 | e-ISBN: 9780191601200 | DOI: http://dx.doi.org/10.1093/0199271402.003.0007
 The Effect of Common Currencies on International Trade: A Meta-Analysis

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Nineteen recent studies have already investigated the effect of currency union on trade, resulting in 383 point estimates of the effect. In an attempt to summarize the current state of the debate, meta-analysis is used here to combine the disparate estimates. The chief findings are that (a) the hypothesis that there is no effect of currency union on trade can be rejected at standard significance levels, (b) the combined estimate implies that currency union approximately doubles trade, and (c) the estimates are heterogeneous and not consistently tied to features of the studies.

Keywords: currency union; currency-union effect on trade; meta-analysis; test of estimates; trade creation

Chapter.  4098 words.  Illustrated.

Subjects: Economic Systems

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