This paper quantifies the most likely trade effects of the euro introduction using a panel data set of 29 European economies extended over the period 1994 to 2011. For this purpose, a gravity model of international trade is used. Following the recommendations of Santos Silva and Tenreyro (2006) paper [The log of gravity. Rev Econ Stat. 88 (4), 641–658], the gravity equation is estimated using Poisson pseudo-maximum-likelihood (PPML) technique. The main finding of this study is that the introduction of the euro has a small but statistically significant effect on export flows of European economies. The PPML estimates report this effect (euro effect) to be around 7%. This effect, although small, matches with the findings of the recent studies.
CITATION STYLE
Kunroo, M. H., Sofi, I. A., Khurana, M., & Mogha, S. K. (2017). Re-visiting the impact of the euro on trade flows: New evidence using gravity equation with poisson count-data technique. In Advances in Intelligent Systems and Computing (Vol. 547, pp. 229–239). Springer Verlag. https://doi.org/10.1007/978-981-10-3325-4_23
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