Will the Euro Hurt Industrialization of Europe’s Southern Trading Partners?
With the biggest change in the international monetary system since the dollar was taken off gold more than two decades ago, many countries are questioning the impact of EMU on their real economy. Indeed, it is often asserted that the volatility of European exchange rates and the degree of variability of the euro affect countries with close economic ties to the eurozone (e.g., IMF 1997, 73). This paper investigates these two issues and estimates the impact of the first with an industrial panel for five regions: Eurozone (EZ-11), West Africa (WA-14), North Africa (NA-4), Middle East (ME-12) and other Mediterranean countries (OM-5)1. Hence, the panel covers 46 countries, 11 industries, and an unbalanced time span of maximum 38 years.
KeywordsTransaction Cost Middle East Production Structure Income Effect Export Performance
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