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Monetary Integration in Europe in the Function of Fostering International Business

In: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Kotor, Montengero, 10-11 September 2015

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  • Šapić, Srđan
  • Furtula, Srđan

Abstract

Through joining the European Economic and Monetary Union a heterogeneous influence of member states cannot be avoided but all countries follow the logic of the economic benefits of unification. Besides reducing transaction costs, greater transparency in prices and the elimination of the uncertainty of exchange rate fluctuations, there is a great impact of open borders on increasing trade between member states. Therefore in this article we will analyze the Andrew Rose effect which estimated that countries with same currency trade over three times as much with each other as countries with different currencies. Through objective and systematic analysis we well conclude that the positive effect of monetary integration on increasing of international trade should be carried out in absolute and relative terms.

Suggested Citation

  • Šapić, Srđan & Furtula, Srđan, 2015. "Monetary Integration in Europe in the Function of Fostering International Business," Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (2015), Kotor, Montengero, in: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Kotor, Montengero, 10-11 September 2015, pages 461-467, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb.
    • Handle: RePEc:zbw:entr15:183683
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    References listed on IDEAS

    as
    1. Andrew K. Rose & Mark M. Spiegel, 2011. "The Olympic Effect," Economic Journal, Royal Economic Society, vol. 121(553), pages 652-677, June.
    2. Andrew K. Rose & T. D. Stanley, 2005. "A Meta‐Analysis of the Effect of Common Currencies on International Trade," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 347-365, July.
    3. Rose, Andrew K & Engel, Charles, 2002. "Currency Unions and International Integration," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 34(4), pages 1067-1089, November.
    4. Jeffrey Frankel & Andrew Rose, 2002. "An Estimate of the Effect of Common Currencies on Trade and Income," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(2), pages 437-466.
    5. Kenen,Peter B. & Meade,Ellen E., 2008. "Regional Monetary Integration," Cambridge Books, Cambridge University Press, number 9780521862509, September.
    6. Andrew K. Rose, 2000. "One money, one market: the effect of common currencies on trade," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 15(30), pages 08-45.
    7. Gern, Klaus-Jürgen & Hammermann, Felix & Schweickert, Rainer & Vinhas de Souza, Lúcio, 2004. "European monetary integration after EU enlargement," Kiel Discussion Papers 413, Kiel Institute for the World Economy (IfW Kiel).
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    More about this item

    Keywords

    monetary integration; European Economic and Monetary Union; international trade; international business;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration

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