Swedish trade during the Scandinavian Monetary Union

Abstract: The effects of monetary union on the trade of member countries have been debated. Economists have suggested that monetary unions can significantly increase trade with other member countries in the monetary union and even outside it. This thesis investigates the Swedish membership in the Scandinavian Monetary Union (SMU) from 1875-1910. Using collected data and a tailor made data set on the bilateral trade of the most traded products. Sweden’s bilateral trade between members of the monetary union is compared to non-members. Firstly, on a product level with specialisation indexes, followed by calculations of Revealed Comparative Advantage over time. Finally, a gravity model is applied to quantify any potential SMU effect. The results of this thesis are that the SMU did not have a significant impact on Swedish bilateral trade compared to non-members. Moreover, the thesis illustrates the changes of Swedish exports and imports during this period, confirming previous works on Swedish trade.