Search results for "Rose effect"
showing 2 items of 2 documents
Estimating the Effect of Common Currencies on Trade: Blooming or Withering Roses?
2013
Abstract Using a gravity model and data on 182 countries worldwide, this paper estimates the effects of exchange rate volatility and currency unions on international trade for ten years spanning 1980 through 2010. We provide added confirmation and further strengthen the empirical findings in Rose (2000) prior to 1999, but we find a gradually diminishing Rose effect for the 2000-2010 period, when the Euro Zone is added to the currency union dummy. The rest of the coefficients generally comply in magnitude and sign with what is standard in the “gravity” literature. Our findings support a much stronger effect of a currency union on trade than the hypothetical effect of reducing exchange rate v…
Currency unions and trade : what is the impact of the euro on trade in the euro area?
2012
The aim of this study is to estimate the effect of the euro on trade within the euro area. This has been a relevant question for European politicians ever since the launch of the common currency was agreed on in the Maastricht Treaty in 1992. To analyse the topic the gravity model of international trade augmented with several dummy variables is employed using panel data of 29 developed countries between 1995 and 2010. The estimated aggregate trade effect on the euro zone reaches 10 % in the most preferred regression and is comparable with earlier estimates. However, there is considerable variation in the results when different sample sizes are used. This could be a sign of omitted variable …