An Empirical Analysis of Trade Effects of the European Monetary Union

This master dissertation deals with broadly discussed topic -- are there really some trade enhancing effects for countries that have adopted the euro? This thesis provides an estimate of the effect of the European Monetary Union on trade, taking into account panel data of 37 economies during sample period 1995 -- 2012. The sample consists of 27 European Union members and 10 non-EU OECD countries. After applying gravity model of trade and controlling for gravity-model-specific influences, the effect of the euro on trade obtained from the results of the estimation is positive and statistically significant 9 per cent.This master dissertation deals with broadly discussed topic -- are there really some trade enhancing effects for countries that have adopted the euro? This thesis provides an estimate of the effect of the European Monetary Union on trade, taking into account panel data of 37 economies during sample period 1995 -- 2012. The sample consists of 27 European Union members and 10 non-EU OECD countries. After applying gravity model of trade and controlling for gravity-model-specific influences, the effect of the euro on trade obtained from the results of the estimation is positive and statistically significant 9 per cent