Response to Ritschl and Wolf’s Endogeneity of Currency Areas and Trade Blocs: Evidence from the Inter-War Period

Ritschl and Wolf (2003) rely on an unusual variable for currency unions in their empirical analysis. In particular, their data set indicates that all the country-pairs listed below were considered to be in currency unions in the interwar period. Thus, according to Ritschl and Wolf, Austria and Bulgaria were in a currency union. Indeed, Austria was also in currency union with Czechoslovakia, Denmark, Finland, Germany, Greece, Hungary, Italy, the Netherlands, Norway, Roman, Spain, Sweden, Turkey, and Yugoslavia. And don't forget the monetary union between New Zealand and Germany! There are 267 pairings listed in all by them.