A major economic reason for the introduction of the euro was its supposedly positive effect on intra-EMU trade …. Existing studies examine this suspicion indirectly using non-EMU data and report ambiguous results. We estimate the euro …-effect directly from data that include EMU observations. Using a dynamic panel model for annual bilateral exports, we find that the …

During the pre-EMU period changes in real effective exchange rate or faster-than-trading-partners growth rates Granger … caused changes in trade balance in most of the EMU-12 countries. However, our data driven article provides evidence that … after the adoption of euro, these Granger causalities disappeared. We decompose trade balances into intra balances (trade …