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Zooming out: The trade effect of the euro in historical perspective

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  • Berger, Helge
  • Nitsch, Volker

Abstract

In this paper, we put the trade effect of the euro in historical perspective. Using a data set that includes 22 industrial countries from 1948 to 2003, we find strong evidence of a gradual increase in trade intensity between European countries over time. Once we control for this trend in trade integration, the euro's impact on trade disappears. Moreover, a significant part of the trend in European trade integration is associated with measurable policy changes in areas such as exchange rate policy and institutional integration.

Suggested Citation

  • Berger, Helge & Nitsch, Volker, 2008. "Zooming out: The trade effect of the euro in historical perspective," Journal of International Money and Finance, Elsevier, vol. 27(8), pages 1244-1260, December.
    • Handle: RePEc:eee:jimfin:v:27:y:2008:i:8:p:1244-1260
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    More about this item

    Keywords

    Monetary union Currency Euro Trade European integration;

    JEL classification:

    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F15 - International Economics - - Trade - - - Economic Integration
    • F02 - International Economics - - General - - - International Economic Order and Integration

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