The Effect of Common Currencies on International Trade: Where do we Stand?
نویسنده
چکیده
Twenty-four recent studies have investigated the effect of currency union on trade, resulting in 443 point estimates of the effect. This paper is a quantitative attempt to summarize the current state of debate; meta-analysis is used to combine the disparate estimates. The chief findings are that: a) the hypothesis that there is no effect of currency union on trade can be rejected at standard significance levels; b) the combined estimate implies that currency union approximately doubles trade; and c) the estimates are heterogeneous and not consistently tied to features of the studies. While there are costs and caveats, the scale of these benefits means that Singapore should consider currency union. JEL Classification Number: F34
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