A Meta-Analysis of the Effect of Common Currencies on International Trade

.  Thirty‐four recent studies have investigated the effect of currency union on trade, resulting in 754 point estimates of this effect. This paper uses meta‐analysis to combine, explain, and to summarize these disparate estimates of common currency trade effects. The hypothesis that there is no effe...

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Bibliographic Details
Published inJournal of economic surveys Vol. 19; no. 3; pp. 347 - 365
Main Authors Rose, Andrew K., Stanley, T. D.
Format Journal Article
LanguageEnglish
Published Oxford, UK; Malden, USA Blackwell Publishing Ltd/Inc 01.07.2005
Blackwell Publishing Ltd
Subjects
Bias
Currencies
Currency
Data analysis
Economic and Monetary Union
Economic theory
Empirical research
Estimation
Euro
International trade
Meta-analysis
Meta-regression analysis
Monetary
Monetary unions
Publication bias
Regression analysis
Review articles
Studies
Union
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Summary:.  Thirty‐four recent studies have investigated the effect of currency union on trade, resulting in 754 point estimates of this effect. This paper uses meta‐analysis to combine, explain, and to summarize these disparate estimates of common currency trade effects. The hypothesis that there is no effect of currency union on trade is easily and robustly rejected at standard significance levels. Combining these estimates implies that a currency union increases bilateral trade by between 30 and 90%. Although there is evidence of publication selection, there is also evidence of a genuine positive trade effect beyond publication bias.
Bibliography:ArticleID:JOES251
The data sets, key output, and past version of the paper are available at Rose's website.
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ISSN:0950-0804
1467-6419
DOI:10.1111/j.0950-0804.2005.00251.x