Monetary Union, Trade Integration, and Business Cycles in 19th Century Europe: Just Do It

Abstract : This Paper seeks to trace the impact of monetary arrangements on trade integration and business cycle correlation, focusing on Europe in the late 19th century period as a guide for modern debates. For this purpose, we first estimate a gravity model and show that monetary arrangements were associated with substantially higher trade. The Austro-Hungarian dual monarchy, by many aspects a forerunner of Euroland, improved trade between member states by a factor of 3. Other arrangements, such as the gold standard and the Scandinavian union also impacted trade favourably. To explain this, we argue that monetary coordination, by fostering the correlation of business cycles compensate the adverse effect that the current account constraint has on trade integration. This is found to vastly compensate the negative consequences that trade integration might have on the symmetry of shocks, of which this Paper finds strong evidence, in contrast with recent empirical work.
Type de document :
Pré-publication, Document de travail
2001
Liste complète des métadonnées

Littérature citée [22 références]  Voir  Masquer  Télécharger

https://hal-sciencespo.archives-ouvertes.fr/hal-01065006
Contributeur : Spire Sciences Po Institutional Repository <>
Soumis le : mercredi 17 septembre 2014 - 16:11:23
Dernière modification le : vendredi 20 juillet 2018 - 14:52:03
Document(s) archivé(s) le : jeudi 18 décembre 2014 - 11:41:55

Fichier

cfi-wp-mf-cepr3087.pdf
Fichiers produits par l'(les) auteur(s)

Identifiants

  • HAL Id : hal-01065006, version 1
  • SCIENCESPO : 2441/607

Collections

Citation

Marc Flandreau, Mathilde Maurel. Monetary Union, Trade Integration, and Business Cycles in 19th Century Europe: Just Do It. 2001. 〈hal-01065006〉

Partager

Métriques

Consultations de la notice

177

Téléchargements de fichiers

479