Readdressing the trade effect of the Euro : allowing for currency misalignment


Hogrefe, Jan ; Jung, Benjamin ; Kohler, Wilhelm K.


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URL: http://ub-madoc.bib.uni-mannheim.de/2930
URN: urn:nbn:de:bsz:180-madoc-29301
Document Type: Working paper
Year of publication: 2010
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: F13 F12 F15 ,
Subject headings (SWD): Euro <Währung> , Außenwirtschaftstheorie , Kaufkraftparität , Wechselkurs , Gravitationsmodell , Kosten-Nutzen-Analyse
Keywords (English): Euro , gravity model , exchange rates , purchasing power parity , trade imbalances
Abstract: We know that euro-area member countries have absorbed asymmetric shocks in ways that are inconsistent with a common nominal anchor. Based on a reformulation of the gravity model that allows for such bilateral misalignment, we disentangle the conventional trade cost channel and trade effects deriving from “implicit currency misalignment”. Econometric estimation reveals that the currency misalignment channel exerts a significant trade effect on bilateral exports. We retrieve country specific estimates of the euro effect on trade based on misalignment. This reveals asymmetric trade effects and heterogeneous outlooks across countries for the costs and benefits from adopting the euro.
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Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt.




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Hogrefe, Jan ; Jung, Benjamin ; Kohler, Wilhelm K. (2010) Readdressing the trade effect of the Euro : allowing for currency misalignment. Open Access [Working paper]
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