The Centre hosted seminars titled “Do Fixed Exchange Rates Cause More Trade?” and “When Do Currency Unions Increase Trade?” on 12 February 2013 in its headquarters. The seminar was delivered by Mr. Amr Sadek Hosny, University of Wisconsin-Milwaukee, USA.
Building upon the previous literature which point to a significant and highly positive effect of adopting a fixed Exchange Rate Regime (ERR) on bilateral trade between any given country pair, the first study underlined that these results should not be interpreted as causal effects, since countries did not typically choose their ERRs independently of their trade flows. Mr. Hosny argued that this source of selection bias could be greatly reduced when using the matching approach to estimating treatment effects.
The second paper, on the other hand, questioned whether currency unions have heterogeneous effects over the distribution of the trade variable. The cumulative seminar lasted for about one-hour and also featured a Q&A session.