Working Paper: CEPR ID: DP4341
Authors: Andrew K. Rose
Abstract: 34 recent studies have investigated the effect of currency union on trade, resulting in 754 point estimates of the effect. This Paper is a quantitative attempt to summarize the current state of debate; meta-analysis is used 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 a bilateral currency union increases trade by between 30% and 90%; and c) the estimates are heterogeneous and not consistently tied to most features of the studies.
Keywords: currency union; trade; meta-analysis; monetary integration
JEL Codes: F34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Confounding factors (C39) | Trade (F19) |
| Currency unions (F36) | Trade (F19) |