Monetary Integration and Intensity of Mutual Trade of the Eurozone - Empirical Evidence

The present dissertation focuses on the impact of the adoption of common European currency on trade of the eurozone countries. There have been several studies published on the subject of the possible euro's pro-trade impact on economies of the first eurozone participants, most of those studies use sample periods prior to 2003. This thesis contributes to the literature by adding six more years of eurozone data to 2011, capturing two further enlargements of the European Union and four eurozone expansions. The results of the models estimate the effect of common currency on trade to be insignificant. On the other hand, membership in the European Union proved to have significant and important trade enhancing effect of 13 % - 25 %.