Regional welfare effects of the European Monetary Union

Buchbeitrag

This paper estimates welfare effects resulting from reduced transaction costs in international trade, using a static multiregional general equilibrium model. The kernel of the model is the trade part specified in Dixit-Stiglitz-style. Interregional trade shows a gravity pattern due to transaction costs depending on distance. Transaction cost reductions brought about by EMU are based on econometric estimates by GLICK and ROSE, relying on trade intensification following the establishment of other currency unions worldwide. According to our results EMU could imply a welfare gain for the participating countries amounting to 1% of GDP annually. Our simulation results show that this concern that the spatial effect of EMU might contradict the cohesion objectives of the European Union is not to be substantiated. Regions close to the borders are supposed to have the highest trade intensities with partner countries and therefore gain most from saving of transaction costs in international trade.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: In: Spatial implications of the European Monetary Union ; Year: 2004 ; Pages: 27-43 ; ISBN: 3-88838-232-7 ; Series: Studies in Spatial Development ; No. 6 ; Hannover: Akademie für Raumforschung und Landesplanung

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bröcker, Johannes
• Event: Veröffentlichung
• (who): Verlag der ARL - Akademie für Raumforschung und Landesplanung
• (where): Hannover
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/59985
• Last update: 10.03.2025, 11:44 AM CET