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The currency union effect on trade is decreasing over time

De Sousa, Jose (2011): The currency union effect on trade is decreasing over time. Forthcoming in: Economics Letters

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Abstract

Estimating a theoretical gravity model over a sixty-year period, from 1948 to 2009, I found an unexpected trend: the currency union impact on trade is decreasing over time. This result suggests that with trade and financial globalization currency unions become less and less important to promote trade.

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