The consequences of the introduction of the euro: A nested mixed-effects analysis of the international banking positions

Kazusuke Tsujimura, Masako Tsujimura

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

In this paper, we will examine the effects of the launch of the euro from the perspective of the international banking positions by a combination of the gravity model, widely used to explain the structure of world trade, and the mixed effects model, which is a hybrid version of the fixed and random effects models of panel data analysis. The specification could be examined by the likelihood ratio tests by decomposing the model into fixed and random effects elements. The empirical study indicates that the new currency is certain to benefit the euro area, but the effects on the non-euro members of the EU are not as clear as superficial analysis suggests.

Original languageEnglish
Pages (from-to)583-597
Number of pages15
JournalEmpirical Economics
Volume37
Issue number3
DOIs
Publication statusPublished - 2009 Jan 1

Keywords

  • Gravity model
  • International banking positions
  • Introduction of the euro
  • Mixed effects model
  • Nested panel data

ASJC Scopus subject areas

  • Statistics and Probability
  • Mathematics (miscellaneous)
  • Social Sciences (miscellaneous)
  • Economics and Econometrics

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