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:: Volume 9, Issue 2 (Spring 2014) ::
J. Mon. Ec. 2014, 9(2): 140-166 Back to browse issues page
Currency Union and Bilateral Trade: Evidence from OIC Countries
Ali Fegheh Majidi
University of Kurdistan
Abstract:   (2028 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         

Keywords: Currency Union, Augmented Gravity Model, OIC, OCA Theory
Full-Text [PDF 504 kb]   (944 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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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


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Volume 9, Issue 2 (Spring 2014) Back to browse issues page
Journal of Money and Economy Journal of Money And Economy
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