Euro Effects on the Intensive and Extensive Margins of Trade

50 Pages Posted: 12 Jan 2007  

Harry Flam

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

Hakan Nordström

Swedish Board of Trade

Date Written: December 2006

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 Classification: F1

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: https://ssrn.com/abstract=956274

Harry Flam (Contact Author)

Stockholm University - Institute for International Economic Studies (IIES) ( email )

Stockholm, SE-10691
Sweden

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Hakan Nordström

Swedish Board of Trade ( email )

Sweden

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