Has the Euro Boosted Intra-Euro Area Exports? Evidence from Industry Data

Gavin Murphy, Iulia Siedschlag


We estimate the euro effect on export patterns using a panel of industry data from Ireland over the period 1993-2004. Our main innovation is to account for country and industry specific omitted trending variables bias. We find that the euro effect on Irish exports to the euro area countries relative to the rest of the trading partners of Ireland has been positive, significant and increasing since 2000. Furthermore, we find heterogeneous euro effects across industries. We find consistent significant positive euro effects for industries characterised by increasing returns to scale.


European economic and monetary union; gravity models, time and industry heterogeneity, omitted trending variables bias

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DOI: http://dx.doi.org/10.5202/rei.v2i3.44

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