The Euro Effect on Eurozone Exports

Abstract

In this article, we examine the impact of the real effective exchange rate for several countries in the Euro area over the period before and after the introduction of the euro. Based on ARDL modeling techniques, we estimate the long-run and short-run relationships between exports volumes and a number of key variables, namely Real Effective Exchange Rate, weighted GDP and Output Gap. This article is particularly oriented towards the study of long-term relationships between the exchange rate and global exports performance, on the one hand; and between exchange rates and intra-European exports performance, on the other. Two measures of exchange rate are considered: a global real exchange rate to investigate the impact of exchange rates on overall exports and an intra European real exchange rate calculated to detect its effect on intra-European trade. The study shows that there is a big difference between the impact of exchange rates on exports before and after the establishment of the European Monetary Union on the one hand, and between the impacts of exchange rates on intra-European global exports on the other hand.

Do Free Trade Regimes and Common Currency Drive Export Growth?

“…Murphy and Siedschlag (2011) estimated that monetary integration had positive, significant and increasing effect on export. Bouchoucha (2015) analysis showed that the real effective exchange rate has bigger impact on exports between euro area countries than on global exports. Recent research (Sousa et al, 2008;Maurel, 2009;Carole, 2009;Katsikeas et al, 2010;Moghaddam et al, 2011;Stioan et al, 2011) reveals that export driving determinants can be divided into two groups: internal and external.…”

Is Real Depreciation and More Government Spending Expansionary? The Case of Montenegro

“…This paper extends the works of the impacts of real depreciation on imports and exports by Stučka, (2003), Breuer and Klose (2015) and Bouchoucha (2015) and examines the impact of real depreciation on aggregate demand and aggregate output. The contribution of the paper is that the theoretical model extends the IS-MP-AS model (Romer, 2000(Romer, , 2006 and consists of additional new variables such as the real exchange rate, world real income, the world real interest rate, and the real oil price so that international trade, open economy and supply shocks are considered.…”

“…In assessing the impact of the Euro exchange rate on exports, Bouchoucha (2015) reveals that the effect of the real effective exchange rate of the euro on intra-euro area exports is greater than that on global exports and that the effect of the real effective exchange rate of the euro on exports before and after the EMU also differs. He also indicates that Italy and Spain have more structural problems than price competitiveness due to the insignificance of the real effective exchange rate of the euro.…”

Estimating the effect of the EMU on current account balances: A synthetic control approach

“…France saw its cost competitiveness vis-à-vis Germany (its biggest export competitor) deteriorate during the 2000s (Bouchoucha, 2015;Kierzenkowski, 2009). The introduction of the EMU in a set of countries with different wage-setting institutions led to a divergence in real unit labor costs and consequently current account balances (Carlin, 2013;De Grauwe, 2013;Johnston et al, 2014).…”