The Impact Of The Euro On Trade
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The Impact Of The Euro On Trade
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Author : Vanessa Gunnella
language : en
Publisher:
Release Date : 2021
The Impact Of The Euro On Trade written by Vanessa Gunnella and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
The consensus back in 2008 – ten years after the introduction of the euro – was that the adoption of a common currency had made a limited impact of around 2% in total on the trade flows of the first wave of euro area countries (Baldwin et al., 2008). Since then, six more countries have joined the euro area, and firms have internationalised their production processes. These two phenomena are interrelated and may have changed the way the common currency affects the euro area economy. Therefore, with the common currency now into its third decade – and with more countries queuing to adopt it – this paper revisits the trade effects of the euro, focusing on the newer euro adopters (i.e. those countries that have adopted the euro since 2007) and their interaction with the first wave of euro area members via supply chains. The contribution of the paper is twofold. First, it revisits the estimated aggregate impact of the euro on euro area trade, as well as on trade within and between the two waves of adopters. Data on bilateral flows between 1990 and 2015 for an extended sample of countries to estimate a gravity equation indicate a significant trade impact, ranging between 4.3% and 6.3% in total on average, with the magnitude being the highest for exports from the second wave of adopters to the first wave of adopters. If a synthetic control approach (Abadie and Gardeazabal, 2003; Abadie et al., 2010) is used instead, the estimated gains associated with euro adoption are greater. In particular, exports of both intermediate and final products from countries belonging to the first wave of euro adopters to those belonging to the second wave are estimated to have increased by about 30% using this approach. The second contribution made by this paper relates to the channels through which trade might be affected by a currency union. This question is explored by looking separately at trade in intermediate goods and final products. While we find that trade gains were mainly driven by trade in intermediate goods among countries that adopted the currency earlier (5.3%), our results also show that the euro had a positive effect on the exports of final products from the second wave of adopters to other euro area countries. This effect is as high as 10.6% with the gravity model and 32% with the synthetic control approach. One of the reasons for the difference in the range of estimates between the two approaches might be that the gravity model can control for unobserved characteristics via fixed effects, while the synthetic control approach may fail to do so. These results suggest that the euro facilitated the establishment and expansion of international production chains in Europe. In turn, this is likely to have increased business cycle synchronisation in the euro area and to have supported market access for later adopters.
Study On The Impact Of The Euro On Trade And Foreign Direct Investment
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Author : Richard E. Baldwin
language : en
Publisher:
Release Date : 2008
Study On The Impact Of The Euro On Trade And Foreign Direct Investment written by Richard E. Baldwin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with Business categories.
Recoge: 1. Introduction - 2. The essential toolkit: gravity equation theory and econometrics - 3. Trade pricing effects of the euro - 4. Firm level evidence on the euro's trade effect - 5. The newly-traded goods hypothesis: evidence from the trade data - 6. The impact of the euro on foreign direct investment and cross-border mergers and acquisitions - 7. Discussion of channels and the specific questions - 8. Concluding remarks.
Study On The Impact Of The Euro On Trade And Foreign Direct Investment
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Author : Richard E. Baldwin
language : en
Publisher:
Release Date : 2008
Study On The Impact Of The Euro On Trade And Foreign Direct Investment written by Richard E. Baldwin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with Euro categories.
"The introduction of the euro was the world's largest economic 'experiment.' This experiment opens the door to a major advance in our understanding of how a common currency affects economic activity. When it comes to the euro's trade effects the first contribution of this report is to refine 'the number'. Using the latest data and best empirical methodology, we confirm the received wisdom that the euro has promoted trade significantly, with the aggregate impact being in the range of 5% or so. The second main contribution of this report was to advance and refine our understanding of exact how the euro was boosting trade. The euro boosted trade inside the Eurozone since it lowered the relative price of traded goods coming from the Eurozone. The second main channel is the newly-trade goods channel. The third main contribution of the report concerns the euro's pro-FDI effects."--Publication information page
The Impact Of The Euro On Latin America
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Author : Dorte Verner
language : en
Publisher: World Bank Publications
Release Date : 2000-01-01
The Impact Of The Euro On Latin America written by Dorte Verner and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2000-01-01 with Political Science categories.
"Trade between the European Union (EU) and developing countries is importantaround 22 percent of the EU's exports go to developing countries, while 20 percent of the EU's imports originate in those countries. More specifically, trade between Latin America and the EU has ballooned in recent times..."What are the risks and opportunities facing the Latin American and Caribbean (LAC) region from the introduction of the euro? Will the replacement of the European currency basket by the euro have real economic effects, or will it be little more than an accounting phenomenon? This slim volume attempts to answer those questions. In doing so it covers the current economic situation, presents financial flow, discusses the value and volatility of the euro, and the financial implications of the euro, including the banking system and foreign debt and reserve management. Overall, the report gives a broad picture of the possible impact of the euro on the LAC region.
The Impact Of The Euro And The Emu On Intra Euro Area Trade Fdi And The Euro Area Balance Of Payments
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Author : Martin Pfleger
language : en
Publisher: GRIN Verlag
Release Date : 2010-06-24
The Impact Of The Euro And The Emu On Intra Euro Area Trade Fdi And The Euro Area Balance Of Payments written by Martin Pfleger and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-06-24 with Business & Economics categories.
Bachelor Thesis from the year 2010 in the subject Economics - Monetary theory and policy, grade: 1, University of applied sciences, language: English, abstract: Although the Euro has already been introduced as an official currency more than 10 years ago, the opinions of its effects so far and its future implications on the participating countries still vary dramatically. In this study, the author analyzes the effects of the Euro and the European Monetary Union on intra-Euro area trade, foreign direct investment inflows into the Euro area, and the balance of payments of the 11 original Euro member countries. This paper starts with an investigation of the historical development of the Euro and the European Monetary Union and an explanation of the terms intra European trade, foreign direct investment, and the balance of payments. By comparing results from prior literature and using data from international institutions, the results show that intra Euro area trade and foreign direct investment inflows into the Euro area have increased and that the Euro area balance of payments is developing towards less surpluses and perhaps even deficits on the current account. On the basis of these findings, the author reasons that the Euro area has become a more attractive place in which to invest which eventually may lead to constant future current account deficits of the Euro area.
The Impact Of The Euro On International Trade And Investment
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Author : Henry Flam
language : en
Publisher:
Release Date : 2009
The Impact Of The Euro On International Trade And Investment written by Henry Flam and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
In Or Out
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Author : Richard E. Baldwin
language : en
Publisher: Centre for Economic Policy Research
Release Date : 2006
In Or Out written by Richard E. Baldwin and has been published by Centre for Economic Policy Research this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with Commerce categories.
Annotation. "This report marshals the best available empirical evidence on the size and nature of the euro's pro-trade effects and groups the policy implications of these findings into two broad categories - lessons for potential joiners; and lessons for the euro area's current members and its economic management."--Jacket.
The Impact Of The Euro On Trade
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Author : Sergio De Nardis
language : en
Publisher:
Release Date : 2003
The Impact Of The Euro On Trade written by Sergio De Nardis and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with categories.
Study On The Impact Of The Euro On Trade And Foreign Direct Investment
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Author :
language : en
Publisher:
Release Date : 2006
Study On The Impact Of The Euro On Trade And Foreign Direct Investment written by and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
The Impact Of The Euro On The Quality Of Trade
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Author : Tadashi Ito
language : en
Publisher:
Release Date : 2016
The Impact Of The Euro On The Quality Of Trade written by Tadashi Ito and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
This paper examines the effects of a common currency on the quality of traded goods. For this purpose, we construct a quality-based heterogeneous firm trade model to incorporate the formation of currency unions and the ensuing elimination of exchange rate volatility. Our main hypothesis is that a common currency enables low-quality (low marginal cost) firms to commence exporting to the common currency's member countries, which causes the average export price to fall. We empirically test this hypothesis for the euro and the eurozone using Harmonized System 8-digit traded product data for European Union countries.