We provide a reduced form model that encompasses a range of static explanations for the Edgeworth cycle. The model distills two common features that lie behind a range of intuitive explanations for Edgeworth cycles: discontinuity in demand and a positive residual demand.

Most gravity model specifications assume that a currency union varies the level of bilateral trade between members by a constant proportion. We demonstrate that a common currency also alters the slope of the relationship between bilateral trade and member country GDPs.