Publication detail

Rose Effect and the Euro: Is the Magic Gone?

Author(s): prof. PhDr. Tomáš Havránek Ph.D.,
Type: Articles in journals with impact factor
Year: 2010
Number: 0
Published in: Review of World Economics, 146(2), 241-261
Publishing place:
Keywords: Rose effect; Trade; Currency union; Euro; Meta-analysis; Publication bias
JEL codes:
Suggested Citation:
Grants: GAUK 76810 Development and Application of Meta-Analytic Methods in Economics IES Research Framework Institutional task (2005-2011) Integration of the Czech economy into European union and its development
Abstract: This paper presents an updated meta-analysis of the effect of currency unions on trade, focusing on the Euro area. Using meta-regression methods such as funnel asymmetry test, evidence for strong publication bias is found. The estimated underlying effect for currency unions other than Eurozone reaches about 50%. However, the Euro's trade promoting effect corrected for publication bias is insignificant according to the meta-regression analysis and significant but very small (1%--6%) using the trim and fill method. The Rose effect literature shows signs of the economics research cycle: reported t-statistic is a quadratic function of publication year. Explanatory meta-regression (robust fixed effects and random effects) suggests that results published by some authors might be predictable and that outcomes are systematically dependent on study design (usage of panel data, short- or long-run nature, number of countries in the dataset). Interestingly, papers written in LaTeX were also found to report significantly different results.


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