European Integration and the Regionalization of World Trade and Currencies: The Economics and the Politics
No hay miniatura disponible
Fecha
Autores
Título de la revista
ISSN de la revista
Título del volumen
Editor
Resumen
Descripción
Using the gravity model, we find evidence that the EC affects trade flows. A pair of EC
members trade with each other 48 percent more than two otherwise similarly-placed
countries. We also find that bilateral exchange rate variability fell by half within Europe
during the 1980s, and that this stability worked to increase intra-continental trade by an
estimated 5.9 percent. If account is taken of the endogeneity of the currency regime, the
estimated effect of bilateral exchange rate variability on trade is much smaller. The political
economy part of the paper catalogues ways in which regional arrangements undermine
political support for multilateral liberalization, and ways in which they can have the opposite
effect.