Trade effects of monetary agreements: Evidence for OECD countries

This paper analyses the effects of monetary agreements on trade flows using a sample of 25 OECD countries over the period 1950–2004. We find that these agreements have boosted intra-bloc trade. This result especially applies to the case of the euro. More importantly, in contrast to regional trade ag...

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Bibliographic Details
Published in:European economic review 2008-05, Vol.52 (4), p.733-755
Main Authors: Gil-Pareja, Salvador, Llorca-Vivero, Rafael, Martínez-Serrano, José Antonio
Format: Article
Language:English
Subjects:
Agreements
Euro
Eurozone
Impact analysis
Industrialized nations
International monetary relations
International trade
Monetary agreements
Monetary policy
OECD
OECD countries
Studies
Trade agreements
Trade creation
Trade diversion
Trade volume
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Summary:This paper analyses the effects of monetary agreements on trade flows using a sample of 25 OECD countries over the period 1950–2004. We find that these agreements have boosted intra-bloc trade. This result especially applies to the case of the euro. More importantly, in contrast to regional trade agreements, all monetary agreements analysed show evidence of trade-creating effects with third countries. Finally, only the euro shows a symmetric impact for the trade-creating effect with non-members, that is, using the euro promotes both the Eurozone's exports and its imports to non-Eurozone markets to a similar extent.
ISSN:0014-2921
1873-572X
DOI:10.1016/j.euroecorev.2007.04.002