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Euro Effects on the Intensive and Extensive Margins of Trade

Harry Flam
Stockholm University - Institute for International Economic Studies (IIES); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Hakan Nordström
Swedish Board of Trade

December 2006

CESifo Working Paper Series No. 1881

Abstract:
We estimate that the euro has increased trade within the eurozone by about 26 percent and trade between the eurozone and outsiders by about 12 percent on average for the years 2002-2005 compared to 1995-1998. The percentage increases were smaller for products that were exported every year during the sample period than for products that were not, indicating significant and substantial effects on the extensive margin of trade. The euro effects were concentrated to semi-finished and finished products, in particular to industries with highly processed products such as pharmaceuticals and machinery.

JEL Classifications: F1

Working Paper Series

Date posted: January 12, 2007 ; Last revised: February 12, 2007

Suggested Citation

Flam, Harry and Nordström, Hakan, Euro Effects on the Intensive and Extensive Margins of Trade (December 2006). CESifo Working Paper Series No. 1881. Available at SSRN: http://ssrn.com/abstract=956274

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Contact Information

Harry Flam (Contact Author) Stockholm University - Institute for International Economic Studies (IIES) ( email ) Stockholm University 10691 Stockholm SE-10691 Sweden
CESifo (Center for Economic Studies and Ifo Institute for Economic Research) Poschinger Str. 5 DE-81679 Munich Germany
Hakan Nordström Swedish Board of Trade ( email ) Sweden