Rose effect and the euro: Is the magic gone?

Review of World Economics

Volumn 146, Issue 2, 2010, Pages 241-261

  Havranek T ^a,b  

^a CZECH NATIONAL BANK   (Czech Republic)

^b CHARLES UNIVERSITY   (Czech Republic)

Author keywords

Currency union; Euro; Meta analysis; Publication bias; Rose effect; Trade

Indexed keywords

EID: 77953913498     PISSN: 16102878     EISSN: 16102886     Source Type: Journal    
DOI: 10.1007/s10290-010-0050-1     Document Type: Article

References (91)

1. Abreu, M., de Groot, H. L. F., & Florax, R. J. G. M. (2005). A meta-analysis of β-convergence: The legendary 2%. Journal of Economic Surveys, 19(3), 389-420.
2. Adam, C., & Cobham, D. (2007). Exchange rate regimes and trade. Manchester School, 75(1), 44-63.
3. Alesina, A., Barro, R. J., & Tenreyro, S. (2003). Optimal currency areas. NBER Macroeconomics Annual, 17, 301-345.
4. Aristotelous, K. (2006). Are there differences across countries regarding the effect of currency unions on trade? Evidence from EMU. Journal of Common Market Studies, 44(1), 17-27.
5. Ashenfelter, O., Harmon, C., & Oosterbeek, H. (1999). A review of estimates of the schooling/earnings relationship, with tests for publication bias. Labour Economics, 6(4), 453-470.
6. Baldwin, R. (2006). The euro's trade effect. (Working Paper Series 594). Frankfurt a. M.: European Central Bank.
7. Baldwin, R., & di Nino, V. (2006). Euros and zeros: The common currency effect on trade in new goods. (NBER Working Paper 12673). Cambridge, MA: National Bureau of Economic Research.
8. Baldwin, R., di Nino, V., Fontagé, L., de Santis, R. A., & Taglioni, D. (2008). Study on the impact of the euro on trade and foreign direct investment. (Economic Papers 321). Brussels: Office for Infrastructures and Logistics.
9. Baldwin, R., & Taglioni, D. (2004). Positive OCA criteria: Microfoundations for the Rose effect. Technical report, Graduate Institute of International Studies, Geneva.
10. Baldwin, R., & Taglioni, D. (2006). Gravity for dummies and dummies for gravity equations. (NBER Working Paper 12516). Cambridge, MA: National Bureau of Economic Research.
11. Barr, D., Breedon, F., & Miles, D. (2003). Life on the outside: Economic conditions and prospects outside Euroland. Economic Policy, 18(37), 573-613.
12. Barro, R., & Tenreyro, S. (2007). Economic effects of currency unions. Economic Inquiry, 45(1), 1-23.
13. Baxter, M., & Kouparitsas, M. A. (2006). What determines bilateral trade flows? (NBER Working Paper 12188). Cambridge, MA: National Bureau of Economic Research.
14. Berger, H., & Nitsch, V. (2008). Zooming out: The trade effect of the euro in historical perspective. Journal of International Money and Finance, 27(8), 1244-1260.
15. Bomberger, W. (2002). Decolonization and estimates of the time series effect of currency unions. Technical report, University of Florida.
16. Borenstein, M., Rothstein, H. R., Hedges, L. V., & Higgins, J. P. (2009). Introduction to meta-analysis. London: Wiley.
17. Bowland, B. J., & Beghin, J. C. (2001). Robust estimates of value of a statistical life for developing economies. Journal of Policy Modeling, 23(4), 385-396.
18. Brouwer, J., Paap, R., & Viane, J.-M. (2008). The trade and FDI effects of EMU enlargement. Journal of International Money and Finance, 27, 188-208.
19. Bun, M. J., & Klaassen, F. J. (2002). Has the euro increased trade? (Tinbergen Institute Discussion Paper 02-108/2). Amsterdam: Tinbergen Institute.
20. Bun, M. J., & Klaassen, F. J. (2007). The euro effect on trade is not as large as commonly thought. Oxford Bulletin of Economics and Statistics, 69(4), 473-496.
21. Cabasson, D. (2003). Survey about monetary unions. Technical report, Ecole Polytechnique, Paris.
22. Cafiso, G. (2008). The euro's influence upon trade-rose effect versus border effect. (Working Paper Series 941). Frankfurt a. M.: European Central Bank.
23. Card, D., & Krueger, A. B. (1995). Time-series minimum-wage studies: A meta-analysis. American Economic Review, 85(2), 238-243.
24. Chintrakarn, P. (2008). Estimating the euro effects on trade with propensity score matching. Review of International Economics, 16(1), 186-198.
25. de Nardis, S., de Santis, R., & Vicarelli, C. (2008). The Single Currency's effects on eurozone sectoral trade: Winners and losers? Economics-The Open-Access, Open-Assessment E-Journal, 2, 2008-17. http://www. economics-ejournal. org/economics/journalarticles/2008-17.
26. de Nardis, S., & Vicarelli, C. (2003a). Currency union and trade: The special case of EMU. Review of World Economics/Weltwirtschaftliches Archiv, 139(4), 625-649.
27. de Nardis, S., & Vicarelli, C. (2003b). The impact of euro on trade: The (early) effect is not so large. (ISAE Working Paper 31). Rome: Institute for Studies and Economic Analyses.
28. de Sousa, J., & Lochard, J. (2003). Do currency unions solve the border effect puzzle? Technical report, University of Paris.
29. de Sousa, J., & Lochard, J. (2007). The currency union effect on trade and the FDI channel. Cahiers de la maison des sciences economiques, Université Panthéon-Sorbonne (Paris 1).
30. de Souza, L. V. (2002). Trade effects of monetary integration in large, mature economies: A primer on the European monetary union. (Kiel Working Paper 1137). Kiel: Kiel Institute for the World Economy.
31. Doucouliagos, C., & Stanley, T. D. (2009). Publication selection bias in minimum-wage research? A meta-regression analysis. British Journal of Industrial Relations, 47(2), 406-428.
32. Egger, M., Smith, G. D., Scheider, M., & Minder, C. (1997). Bias in meta-analysis detected by a simple, graphical test. British Medical Journal, 316, 629-634.
33. Estevadeordal, A., Frantz, B., & Taylor, A. M. (2003). The rise and fall of world trade, 1870-1939. The Quarterly Journal of Economics, 118(2), 359-407.
34. Faruqee, H. (2004). Measuring the trade effects of EMU. (IMF Working Paper 04/154). Washington, DC: International Monetary Fund.
35. Flam, H., & Nordström, H. (2006a). Euro effects on the intensive and extensive margins of trade. (Working Paper 1881). Munich: CESifo.
36. Flam, H., & Nordström, H. (2006b). Trade volume effects of the Euro: Aggregate and sector estimates. (Seminar Paper 746). Stockholm: Stockholm University, Institute for International Economic Studies.
37. Flandreau, M., & Maurel, M. (2005). Monetary union, trade integration, & business cycles in 19th Century Europe. Open Economies Review, 16(2), 135-152.
38. Frankel, J. (2006). Comments on Baldwin (2006) 'The euro's trade effect'. (Working Paper Series 594). Frankfurt a. M.: European Central Bank.
39. Frankel, J. (2008a). The estimated effects of the euro on trade: Why are they below historical effects of monetary unions among smaller countries? (NBER Working Paper 14542). Cambridge, MA: National Bureau of Economic Research.
40. Frankel, J. A. (2008b). Should Eastern European Countries join the euro? A review and update of trade estimates and consideration of endogenous OCA criteria. (Working Paper Series RWP08-059). Cambridge, MA: Harvard University, John F. Kennedy School of Government.
41. Frankel, J. A., & Rose, A. (2002). An estimate of the effect of common currencies on trade and income. The Quarterly Journal of Economics, 117(2), 437-466.
42. Galbraith, R. F. (1988). A note on graphical presentation of estimated odds ratios from several clinical trials. Statistics in Medicine, 7, 889-894.
43. Glick, R., & Rose, A. K. (2002). Does a currency union affect trade? The time-series evidence. European Economic Review, 46(6), 1125-1151.
44. Goldfarb, R. S. (1995). The economist-as-audience needs a methodology of plausible inference. Journal of Economic Methodology, 2(2), 201-222.
45. Gomes, T., Graham, C., Helliwell, J., Kano, T., Murray, J., & Schembri, L. (2006). The euro and trade: Is there a positive effect? Technical report, Bank of Canada, Ottawa.
46. Görg, H., & Greenaway, D. (2004). Much ado about nothing? Do domestic firms really benefit from foreign direct investment? World Bank Research Observer, 19(2), 171-197.
47. Hamilton, L. C. (2006). Statistics with STATA. Belmont, CA: Duxbury Press.
48. Honohan, P. (2001). Discussion of Rose (2001) 'Currency unions and trade: The effect is large'. Economic Policy, 33, 457-461.
49. Kenen, P. B. (2002). Currency unions and trade: Variations on themes by Rose and Persson. (Reserve Bank of New Zealand Discussion Paper Series 2002/08). Wellington: Reserve Bank of New Zealand.
50. Klein, M. W. (2005). Dollarization and trade. Journal of International Money and Finance, 24(6), 935-943.
51. Knapp, G., & Hartung, J. (2003). Improved tests for a random effects meta-regression with a single covariate. Statistics in Medicine, 22, 2693-2710.
52. Koetse, M. J., Florax, R., & Groot, H. D. (2010). Consequences of effect size heterogeneity for meta-analysis: A Monte Carlo study. Statistical Methods and Applications, (forthcoming).
53. Krassoi-Peach, E., & Stanley, T. (2009). Efficiency wages, productivity and simultaneity: A meta-regression analysis. Journal of Labor Research, 30(3), 262-268.
54. Krueger, A. B. (2003). Economic considerations and class size. Economic Journal, 113(485), 34-63.
55. Levi Yeyati, E. (2003). On the impact of a common currency on bilateral trade. Economics Letters, 79(1), 125-129.
56. Lopéz-Córdova, J. E., & Meissner, C. M. (2003). Exchange-rate regimes and international trade: Evidence from the classical gold standard era. American Economic Review, 93(1), 344-353.
57. Masson, P. R. (2008). Currency unions in Africa: Is the trade effect substantial enough to justify their formation? The World Economy, 31(4), 533-547.
58. McKenzie, M. D. (1999). The impact of exchange rate volatility on international trade flows. Journal of Economic Surveys, 13(1), 71-106.
59. Micco, A., Stein, E., & Ordonez, G. (2003). The currency union effect on trade: Early evidence from EMU. Economic Policy, 18(37), 315-356.
60. Mélitz, J. (2001). Geography, trade and currency union. (CEPR Discussion Papers 2987). London: Centre for Economic Policy Research.
61. Mélitz, J. (2008). Language and foreign trade. European Economic Review, 52(4), 667-699.
62. Nitsch, V. (2002a). Comparing apples and oranges: The trade effect of multilateral currency unions is small. Technical report, Bankgesellschaft Berlin.
63. Nitsch, V. (2002b). Honey, I shrunk the currency union effect on trade. The World Economy, 25(4), 457-474.
64. Pakko, M. R., & Wall, H. J. (2001). Reconsidering the trade-creating effects of a currency union. FRB St. Louis Review, 83, 37-46.
65. Persson, T. (2001). Currency unions and trade: How large is the treatment effect? Economic Policy, 16(33), 433-462.
66. Rabe-Hesketh, S., & Skrondal, A. (2008). Multilevel and longitudinal modeling using stata. College Station, TX: Stata Press.
67. Rose, A. K. (2000). One money, one market: The effect of common currencies on trade. Economic Policy, 15(30), 7-46.
68. Rose, A. K. (2001). Currency unions and trade: The effect is large. Economic Policy, 16(33), 449-461.
69. Rose, A. K. (2004). Do we really know that the WTO increases trade? American Economic Review, 94(1), 98-114.
70. Rose, A. K., & Engel, C. (2002). Currency unions and international integration. Journal of Money, Credit and Banking, 34(4), 1067-89.
71. Rose, A. K., & Stanley, T. D. (2005). A meta-analysis of the effect of common currencies on international trade. Journal of Economic Surveys, 19(3), 347-365.
72. Rose, A. K., & van Wincoop, E. (2001). National money as a barrier to international trade: The real case for currency union. American Economic Review, 91(2), 386-390.
73. Sadikov, A. M., Zeng, L., Clark, P. B., Wei, S.-J., & Tamirisa, N. T. (2004). A new look at exchange rate volatility and trade flows. (IMF Occasional Paper 235). Washington, DC: International Monetary Fund.
74. Saiki, A. (2002). Common currency as an export promoting strategy. Technical report, Brandeis University.
75. Shin, Y., & Serlenga, L. (2007). Gravity models of intra-EU trade: Application of the CCEP-HT estimation in heterogeneous panels with unobserved common time-specific factors. Journal of Applied Econometrics, 22(2), 361-381.
76. Shirono, K. (2008). Real effects of common currencies in East Asia. Journal of Asian Economics, 19(3), 199-212.
77. Smith, C. (2002). Currency unions and gravity models revisited. (Reserve Bank of New Zealand Discussion Paper Series 2002/07). Wellington: Reserve Bank of New Zealand.
78. Stanley, T., & Doucouliagos, C. (2007). Identifying and correcting publication selection bias in the efficiency-wage literature: Heckman meta-regression. (Economics Series 2007/11). Burwood: Deakin University.
79. Stanley, T., Doucouliagos, C., & Jarrell, S. B. (2008). Meta-regression analysis as the socio-economics of economics research. The Journal of Socio-Economics, 37(1), 276-292.
80. Stanley, T. D. (2001). Wheat from Chaff: Meta-analysis as quantitative literature review. Journal of Economic Perspectives, 15(3), 131-150.
81. Stanley, T. D. (2005a). Beyond publication bias. Journal of Economic Surveys, 19(3), 309-345.
82. Stanley, T. D. (2005b). Integrating the empirical tests of the natural rate hypothesis: A meta-regression analysis. Kyklos, 58(4), 611-634.
83. Stanley, T. D. (2008). Meta-regression methods for detecting and estimating empirical effects in the presence of publication selection. Oxford Bulletin of Economics and Statistics, 70(1), 103-127.
84. Stanley, T. D., & Jarrell, S. B. (1989). Meta-regression analysis: A quantitative method of literature surveys. Journal of Economic Surveys, 3(2), 161-70.
85. Subramanian, A., & Wei, S.-J. (2007). The WTO promotes trade, strongly but unevenly. Journal of International Economics, 72(1), 151-175.
86. Sutton, A. J., Abrams, K. R., Jones, D. R., Sheldon, T. A., & Song, F. (2000). Methods for meta-analysis in medical research. Chichester: Wiley.
87. Taglioni, D. (2004). Monetary union, exchange rate variability and trade. Ph. D. thesis, University of Geneva.
88. Tenreyro, S. (2001). On the causes and consequences of currency unions. Technical report, Harvard University.
89. Thom, R., & Walsh, B. (2002). The effect of a currency union on trade: Lessons from the Irish experience. European Economic Review, 46(6), 1111-1123.
90. Tsangarides, C. G., Ewenczyk, P., & Hulej, M. (2006). Stylized facts on bilateral trade and currency unions: Implications for Africa. (IMF Working Paper 06/31). Washington, DC: International Monetary Fund.
91. Yamarik, S., & Ghosh, S. (2005). A sensitivity analysis of the gravity model. The International Trade Journal, 19, 83-126.