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Abstract

This paper revisits the early time series estimates of currency unions on trade from an historical perspective using a dynamic gravity equation and by conducting in-depth case studies of currency union breakups. The early large estimates were driven by omitted variables, as many currency union exits were coterminous with warfare, communist takeovers, coup d-etats, genocide, bloody wars of independence, various other geopolitical travesties, or were predated by trade collapses. Static gravity estimates are found to be sensitive to controlling for these omitted variables, while a dynamic gravity specification implies that currency unions do not increase trade.



Item Type: MPRA Paper -

Original Title: Estimating the impact of currency unions on trade using a dynamic gravity framework-

Language: English-

Keywords: Currency Unions, Trade, Dynamic Gravity, Decolonization-

Subjects: F - International Economics > F1 - Trade > F15 - Economic IntegrationF - International Economics > F3 - International Finance > F33 - International Monetary Arrangements and InstitutionsF - International Economics > F5 - International Relations, National Security, and International Political Economy > F54 - Colonialism ; Imperialism ; Postcolonialism-





Author: Campbell, Douglas L.

Source: https://mpra.ub.uni-muenchen.de/35531/







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