Volume 9, Issue 2 (Spring 2014)                   J. Mon. Ec. 2014, 9(2): 140-166 | Back to browse issues page

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Fegheh Majidi A. Currency Union and Bilateral Trade: Evidence from OIC Countries. J. Mon. Ec. 2014; 9 (2) :140-166
URL: http://jme.mbri.ac.ir/article-1-108-en.html
University of Kurdistan
Abstract:   (2744 Views)

In recent years, there has been an increasing interest in currency unions internationally. The formation of currency union in Organization of Islamic Cooperation (OIC) has drawn much attention of Islamic countries. This paper aims to investigate the effect of currency union formation for trade among 49 Islamic countries over the period 1990-2012 by OCA and Augmented Gravity Model (AGM). The results show that common language, borders, and trade unions had positive and significant effect on trade in OIC countries; and being landlocked and distance between source and host countries had negative and significant effect on bilateral trade. Also, the currency union had positive and significant effects on trade in OIC countries. The evidence thus suggests that regional currency union arrangements stimulate bilateral trade in OIC rigorously.

JEL Classification: F47, E49         

Full-Text [PDF 504 kb]   (1252 Downloads)    
Type of Study: Original Research - Theoric | Subject: Monetary Economics
Received: 31 Dec 2014 | Accepted: 22 Oct 2016 | Published: 22 Oct 2016

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