Trade Invoicing in the Accession Countries: Are They Suited to the Euro? / Linda Goldberg.

Format:

Book

Author/Creator:

Goldberg, Linda.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w11653.

NBER working paper series no. w11653

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Trade Invoicing in the Accession Countries

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2005.

Summary:

The accession countries to the euro area are increasingly binding their economic activity, external and internal, to the euro area countries. One aspect of this phenomenon concerns the currency invoicing of international trade transactions, where accession countries have reduced their use of the US dollar in invoicing international trade transactions. Theory predicts that the optimal invoicing choices for accession countries depend on the composition of goods in exports and imports and on the macroeconomic fluctuations of trade partners, both bearing on the role of herding and hedging considerations within exporter profitability. These considerations yield country-specific estimates about the degree of euro-denominated invoicing of exports. I find that the exporters of some accession countries, even in their trade transactions with the euro zone and other European Union countries, might be pricing too much of their trade in euros rather than in dollars, thus taking on excessive risk in international markets.

Notes:

Print version record

October 2005.