meta-analysis of the effect of common currencies on international trade

by Andrew Rose

Publisher: National Bureau of Economic Research in Cambridge, Mass

Written in English
Published: Pages: 24 Downloads: 500
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Subjects:

  • Monetary unions,
  • Coinage, International,
  • International trade

Edition Notes

StatementAndrew K. Rose.
SeriesNBER working paper series -- no. 10373., Working paper series (National Bureau of Economic Research) -- working paper no. 10373.
ContributionsNational Bureau of Economic Research.
The Physical Object
Pagination24 p. :
Number of Pages24
ID Numbers
Open LibraryOL17620299M
OCLC/WorldCa55012457

Ending the U.S. dollar’s link to gold heralded an unprecedented expansion of international trade, particularly after the dissolution of the U.S.S.R. in ended the rouble’s dominance in Eastern Europe. 12 The U.S. dollar is now the “gold standard” currency for international trade—but there is no gold involved. Instead, global trade.   Investments made in the U.S. are denominated in dollars, but unless you are hedging out the currency risk, owning international stocks means you are also subject to fluctuations in local currencies when converting back into dollars. When the dollar is strong, U.S. stocks tend to outperform international equities. “A Meta-Analysis of the Effect of Common Currencies on International Trade,” Journal of Economic Surveys, 19 (), (with Andrew K. Rose). "New Wine In Old Bottles: A Meta-Analysis of Ricardian Equivalence," Southern Economic Journal, 64 (), , available at Jstor.   International trade is the exchange of goods and services between countries. Trading globally gives consumers and countries the opportunity to be exposed to goods and services not available in.

  For example, suppose that a U.S.-based investor purchases a German stock for euros. While holding this stock, the euro exchange rate falls from to euros per U.S. dollar. If the investor sells the stock for euros, he or she will realize a 13% loss upon conversion of the profits from euros to U.S. dollars. Research on methods of meta-analysis (the synthesis of related study results) has dealt with many simple study indices, but less attention has been paid to the issue of summarizing regression slopes. In part this is because of the many complications that arise when real sets of regression models are accumulated. Why the Dollar Is the Global Currency. The Bretton Woods agreement kickstarted the dollar into its current position. Before then, most countries were on the gold standard.. Their governments promised to redeem their currencies for their value in gold upon demand. The world's developed countries met at Bretton Woods, New Hampshire, to peg the exchange rate for all currencies . To quantify the implications of common currencies for trade and income, we use data for over countries and dependencies. In our two–stage approach, estimates at the first stage suggest that belonging to a currency union/board triples trade with other currency union members. Moreover, there is no evidence of trade–diversion.

Currencies were freely convertible into gold, which in effect was a common international money. Balance-of-payments problems were few. People who wished to settle and work in a country could go where they wished with few restrictions; they could open businesses, enter trade, or export capital freely. While international trade did not grab the biggest headlines in , it crashed hard. "Global trade collapsed at a pace not seen since the Great Depression, raising concerns in some quarters that the globalization of the past three decades was going to be reversed," said the Federal Reserve Bank. 3 "Indeed, the drop in trade during the crisis far outpaced the decline in global . Gravity-based cross-sectional evidence indicates that currency unions and currency boards stimulate trade; cross-sectional evidence indicates that trade stimulates income. This paper estimates the effect that common-currency regimes have, via trade, on income per capita. We use economic and geographic data for over countries to quantify the implications of common currencies for trade .   Whenever I do a non-Swedish trade, the requested amount of foreign currency - euro, USD, Norwegian crown, Danish crown - is immediately converted to SEK, and the trade .

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Meta-analysis of the effect of common currencies on international trade. Cambridge, Mass.: National Bureau of Economic Research, © (OCoLC) Material Type: Internet resource: Document Type: Book, Internet Resource: All Authors / Contributors: Andrew Rose; National Bureau of Economic Research.

Nineteen recent studies have already investigated the effect of currency union on trade, resulting in point estimates of the effect. In an attempt to summarize the current state of the debate, meta-analysis is used here 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 Author: Andrew K.

Rose. This paper uses meta‐analysis to combine, explain, and to summarize these disparate estimates of common currency trade effects.

The hypothesis that there is no effect of currency union on trade is easily and robustly rejected at standard significance levels.

Combining these estimates implies that a currency union increases bilateral trade by Cited by: Get this from a library. A meta-analysis of the effect of common currencies on international trade.

[Andrew Rose; National Bureau of Economic Research.] -- "Thirty-four recent studies have investigated the effect of currency union on trade, resulting in point estimates of the effect. This paper is a quantitative attempt to summarize the current.

"A Meta-Analysis of the Effect of Common Currencies on International Trade," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pagesJuly. Andrew Rose, " A Meta-Analysis of the Effect of Common Currencies on International Trade," NBER Working PapersNational Bureau of Economic Research, Inc.

"A Meta-Analysis of the Effect of Common Currencies on International Trade," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pagesJuly. Rose, Andrew K, " A Meta-Analysis of the Effect of Common Currencies on International Trade," CEPR Discussion PapersC.E.P.R.

Discussion Papers. This paper uses the introduction of an exchange rate between Ireland and the UK in as a natural experiment to shed light on the effects of a common currency on the volume of international trade. A Meta-Analysis of the Effect on Common Currency on International Trade Article in Journal of Economic Surveys 19(3) February with Reads How we measure 'reads'.

Thirty‐four recent studies have investigated the effect of currency union on trade, resulting in point estimates of this effect. This paper uses meta‐analysis to combine, explain, and to summarize these disparate estimates of common currency trade effects.

The Effect of Common Currencies on International Trade: A Meta-Analysis In this short paper, I briefly review the small recent literature that estimates the effect of common currencies on trade. I use meta-analysis to provide a quantitative summary of the literature.

The next section briefly reviews the literature qualitatively. A Meta‐Analysis of the Effect of Common Currencies on International Trade*. A Meta-Analysis of the Effect of Common Currencies on International Trade Journal of Economic Surveys, Vol.

19, No. 3, pp.July Number of pages: 19 Posted: 06 Jul CiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): Thirty-four recent studies have investigated the effect of currency union on trade, resulting in point estimates of this effect.

This paper uses meta-analysis to combine, explain, and to summarize these disparate estimates of common currency trade effects. The hypothesis that there is no effect of currency. A Meta-Analysis of the Effect of Common Currencies on International Trade Andrew K. Rose UC Berkeley, CEPR and NBER.

2 Sensitivity of Meta-Analysis of Funnel Plots of Currency Union Trade Effect 1/segamma Default gamma 1 50 1/semedgam Median Effect medgam. Abstract Nineteen recent studies have investigated the effect of currency union on trade, resulting in point estimates of the effect.

This paper is a quantitative attempt to summarize the current state of debate; meta-analysis is used to combine. A Meta-Analysis of the Effect of Common Currencies on International Trade. By Andrew K Rose. Abstract. 34 recent studies have investigated the effect of currency union on trade, resulting in 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. A meta-analysis of the effect of common currencies on International Trade Rose, AK and Stanley, T DA meta-analysis of the effect of common currencies on International Trade, JOURNAL OF ECONOMIC SURVEYS, vol.

19, no. 3, pp.doi: /jx. Common Currencies on International Trade Andrew K. Rose and T.D. Stanley* Abstract Thirty-four recent studies have investigated the effect of currency union on trade, resulting in point estimates of this effect. This paper uses meta-analysis to combine, explain, and to summarize these disparate estimates of common currency trade effects.

A Meta-Analysis of the Effect of Common Currencies on International Trade Andrew Rose. NBER Working Paper No. Issued in March NBER Program(s):International Finance and Macroeconomics, International Trade and Investment Thirty-four recent studies have investigated the effect of currency union on trade, resulting in point estimates of the by: () implement a meta-analysis to thirty-four studies that investigate the effect of currency union on trade.

Combining these estimates, the authors found that a currency union increases bilateral trade by 30 to 90%. This magnitude is lower than the early estimations but still it means a sizeable trade effect. Another important cause of the.

estimates the effect of common currencies on trade. I use meta-analysis to provide a quantitative summary of the literature, and draw out its conclusions for Singapore. The next section briefly reviews the literature qualitatively. Section III is the heart of the paper; it provides the quantitative meta-analysis.

Abstract. Twenty-four recent studies have investigated the effect of currency union on trade, resulting in 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. currency effect on trade is separate from the effect of the elimination of exchange rate variability and finds a large positive effect of a currency union on trade.

Although his methodology has met with criticism, most studies find a positive. Currency unions Their dramatic effect on international trade A gravity model is used to assess the separate effects of exchange rate volatility and currency unions on international trade.

The panel data, bilateral observations for five years during –90 covering countries, includes + observations in which both countries use the same. “A Meta-Analysis of the Effect of Common Currencies on International Trade.” Journal of Economic Surveys, has been cited by the following article.

Keywords: rose effect; common currency; trade; gravity model; monetary union. Introduction to the Rose Effect New developments in the world economy have triggered research designed to better understand the rapidly intensifying cross-border competition among currencies and, ultimately, the trade creating effect of a common currency.

National borders reduce trade, but most estimates of the border effect seem puzzlingly large. We show that major methodological innovations of the last decade combine to shrink the border effect to a one-third reduction in international trade flows worldwide.

For the computation we collect 1, estimates of the border effect reported in 61 studies, codify 32. However, the exact impact depends on a number of features, such as the pricing strategy of firms engaging in international trade and the importance of global production networks.

Trade effects of currency misalignments are predicted to disappear in the long-run, unless an economy is characterized by other relevant distortions. 4 International Money and Common Currencies in Historical Perspective; 5 Geography, Trade, and Currency Union; 6 Comparing Apples and Oranges: The Effect of Multilateral Currency Unions on Trade; 7 The Effect of Common Currencies on International Trade: A Meta-Analysis; 8 Common Currencies and Market Integration Across Cities: How Strong is the.

Time-series minimum-wage studies: A meta-analysis. American Economic Rev Rose, A.K., Stanley, T.D., A Meta-Analysis of the effect on common currency on international trade. Journal of Economic A.C., Head, K., The puzzling persistence of the distance effect on bilateral trade.

Review of Economics and. Rose AK, Stanley T () A meta-analysis of the effect of common currencies on international trade. J Econ Surv 19(3)– CrossRef Google Scholar Rose AK, van Wincoop E () National Money as a barrier to international trade: the real case for currency.

Gravity models of international trade have been frequently applied to estimate the impact of common (official or spoken) language on bilateral trade.

This study provides a meta-analysis based on language effects collected from 81 academic articles. On average, a common (official or spoken) language increases trade flows directly by 44%.Although his methodology has met with criticism, most studies find a positive estimate.

A meta-analysis of the studies confirms that a common currency has a statistically and economically significant trade-creating effect. Citation: Szebeni, Katalin () The effect of common currencies on trade, University of South Africa, Pretoria.