文章基本信息

标题：Currency unions, trade and heterogeneity
本地全文：下载
作者：Natalie Chen ; Dennis Novy
期刊名称：CEP Discussion Paper
出版年度：2018
卷号：2018
语种：English
出版社：Centre for Economic Performance
摘要：How do trade costs affect international trade? This paper offers a new approach. We rely on a flexible gravity equation that predicts variable trade cost elasticities, both across and within country pairs. We apply this framework to the effect of currency unions on international trade. While we estimate that currency unions are associated with a trade increase of around 38 percent on average, we find substantial underlying heterogeneity. Consistent with the predictions of our framework, we find effects around three times as strong for country pairs associated with small import shares, and a zero effect for large import shares. Our results imply that conventional homogeneous currency union estimates do not provide helpful guidance for countries considering to join a currency union. Instead, countries need to take into account the distribution of their trade shares to assess the impact of trade costs.
关键词：currency unions;Euro;gravity;heterogeneity;trade costs;trade elasticity;translog