Are There Winners and Losers in the Game of the Euro?

Abstract: In the midst of the economic turbulence around Europe today, the European currency has been put to its greatest test so far. Now more than ever, an assessment of the euro is needed. The purpose of the paper is therefore to re-assess the euro’s effect on trade and to estimate and compare the individual Member States’ effects. This has been done with bilateral intra-EU trade data and estimated with a gravity model including a euro dummy. The overall effect of the euro was estimated to 8.2% and different individual effects have been found statistically significant, indicating that there are winner and losers in the game of the euro.