The Economic and Monetary Union’s Effect on (International) Trade: The Case of Slovenia Before Euro Adoption

Abstract:     
The main objective of the following article is to present the key findings of the existent research in the field of the influence the introduction of the euro had on the trade of the member states of the Economic and Monetary Union (EMU). The intention of this article is also to inspire further research (especially concerning the effect of the euro on the Slovene foreign trade). Recent empirical researches show that the trade among the members of the EMU has grown on average by 10–15 % due to the use of a common currency and there was also an increase in trade with the non-member states. The trade benefits of the entry of new countries into the EMU will thus not be the same as the benefits of the initial formation of the EMU in the nineties. This claim has been tested on the example of Slovenia. A regression analysis of time series shows that there has been a positive effect on Slovenia’s exports into and a negative effect on its imports from the eurozone precisely at the time of the creation of the EMU in 1999.

Number of Pages in PDF File: 21

Keywords: Euro, Foreign Trade, Economic and Monetary Union (EMU), Slovenia, Time Series

JEL Classification: F13, F17, F30

working papers series