Dollarization Does Promote Trade

Posted: 7 Jan 2014

See all articles by Shu Lin

Shu Lin

Department of Economics, The Chinese University of Hong Kong

Haichun Ye

Shanghai University of Finance and Economics - School of Economics

Date Written: July 1, 2007

Abstract

This study re-evaluates the treatment effect of dollarization on trade while explicitly controlling for self-selection of policy adoption. Employing a variety of non-parametric propensity score matching methods, we show that dollarization not only increases bilateral US trade with dollarized countries, but promotes a dollarizer’s bilateral trade with other dollar-zone countries as well.

Keywords: dollarization; trade; treatment effect; propensity score matching

JEL Classification: F15, F33

Suggested Citation

Lin, Shu and Ye, Haichun, Dollarization Does Promote Trade (July 1, 2007). Journal of International Money and Finance, Vol. 29, No. 6, 2010, Available at SSRN: https://ssrn.com/abstract=2375551

Shu Lin (Contact Author)

Department of Economics, The Chinese University of Hong Kong ( email )

Department of Economics
The Chinese University of Hong Kong
Shatin, N.T., 200433
Hong Kong

Haichun Ye

Shanghai University of Finance and Economics - School of Economics ( email )

111 Wuchuan Road
Shanghai, 200434
China

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