In or Out: Does It Matter? An Evidence-Based Analysis of the Euro's Trade Effects

Richard Baldwin 01 March 2006



Table of Contents 


List of Figures              
List of Tables                  
Executive Summary      

1 Introduction 
2 Literature Review 
  2.1 The Rose vine: review of the pre-Euro literature
  2.2 Empirical findings on the euro area 
  2.3 Did the Euro affect trade pricing? 
3 Is the Euro Area Rose Effect a Spurious Result? 
  3.1 Lies, damned lies and statistics: VAT fraud 
  3.2 The Rotterdam effect 
  3.3 PECS: woes with ROOs 
  3.4 Euro depreciation and appreciation
  3.5 Delayed Single Market effects 
  3.6 Bottom line 
4 What Caused the Euro Area Rose Effect? 
  4.1 Collection of clues 
  4.2 Microeconomic changes that could produce a Rose effect 
5 Testing the New-Goods Hypothesis 
  5.1 First look at the data 
  5.2 Statistical estimates
6 Summary and Policy Implications
  6.1 Implications for nations thinking of joining the euro area 
  6.2 Implications for the ECB and euro area members: not a silver bullet
  6.3 Concluding remarks 

Appendix A: Summary of the most relevant pricing studies
Appendix B: GDP estimates from the regressions


Professor of International Economics at The Graduate Institute, Geneva; Founder & Editor-in-Chief of; exPresident of CEPR


CEPR Policy Research