DP11532 Why Do Estimates of the EMU Effect On Trade Vary so Much?
|Author(s):||Andrew K Rose|
|Publication Date:||September 2016|
|Keyword(s):||common, country, currency, exports, Gravity, meta, monetary, panel, span, union|
|Programme Areas:||International Trade and Regional Economics, International Macroeconomics and Finance|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=11532|
Larger data sets, with more countries and a longer span of time, exhibit systematically larger effects of European monetary union on trade. I establish this stylized fact with meta-analysis and confirm it by estimating a plain-vanilla gravity model. I then explain this finding by examining systematic biases in "multilateral resistance to trade"? manifest in time-varying country fixed effects; bias grows as the sample is truncated by dropping small poor countries.