EMU Enlargement: Its Effects on Intra-area Trade for Current Non-EMU CEEC Economies

This paper investigates the impact the European Union (EU) and the European Monetary Union (EMU) have on the trade of its member countries. Particularly, the main objective of this study are the Central and Eastern European Countries (CEEC). The gravity model forms the basis of this study. The estimation method used within this study is the fixed effect method. This method is used on panel data from 28 EU members between 2000 and 2015. The results support the four hypothesis that the membership of the EU or the EMU have significant impact on the export and import for its members. In addition, time-fixed effects are added in order to ensure time trends not influencing the results.