Quotation Felbermayr, Gabriel, Steininger, Marina. 2019. Revisiting the Euro’s Trade Cost and Welfare Effects. Jahrbücher für Nationalökonomie und Statistik. 239 (5-6), 917-956.




When, about twenty years ago, the Euro was created, one objective was to facilitate intra-European trade by reducing transaction costs. Has the Euro delivered? Using sectoral trade data from 1995 to 2014 and applying structural gravity modeling, we conduct an ex post evaluation of the European Monetary Union (EMU). In aggregate data, we find a significant average trade effect for goods of almost 8 percent, but a much smaller effect for services trade. Digging deeper, we detect substantial heterogeneity between sectors, as well as between and within country-pairs. Singling out Germany, and embedding the estimation results into a quantitative general equilibrium model of world trade, we find that EMU has increased real incomes in all EMU countries, albeit at different rates. E. g. incomes have increased by 0.3, 0.6, and 2.1 percent in Italy, Germany, and Luxembourg, respectively.


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Publication's profile

Status of publication Published
Affiliation External
Type of publication Journal article
Journal Jahrbücher für Nationalökonomie und Statistik (Journal of Economics and Statistics)
Citation Index SSCI
WU Journalrating 2009 A
Language English
Title Revisiting the Euro’s Trade Cost and Welfare Effects
Volume 239
Number 5-6
Year 2019
Page from 917
Page to 956
Reviewed? Y
URL http://www.degruyter.com/view/j/jbnst.2019.239.issue-5-6/jbnst-2019-0015/jbnst-2019-0015.xml
DOI http://dx.doi.org/10.1515/jbnst-2019-0015
Open Access Y
Open Access Link https://www.degruyter.com/document/doi/10.1515/jbnst-2019-0015/html
JEL JEL: F15, F17, N74


Felbermayr, Gabriel (Details)
Steininger, Marina (Ifo Institute, Germany)
Department of Economics (Felbermayr) (Details)
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