TABLE V

Estimated Effects of "Dollarization" and Euro-adoption on Trade and Output

 

 

 

 

 

Potential Effects (% GDP) of:

 

 

% ’95 Trade with:

’95 Trade

Dollarization

Join EMU

 

$ Zone

€ Zone

(% GDP)

Trade

GDP

Trade

GDP

Albania

3

75

47

3

1

70

23

Algeria

13

62

59

15

5

72

24

Angola

50

34

110

109

36

74

25

Australia

14

12

42

12

4

10

3

Bangladesh

20

21

37

15

5

15

5

Belize

44

8

103

90

30

16

5

Brazil

23

24

15

7

2

7

2

Burundi

7

75

33

4

1

49

16

Cambodia

2

8

80

3

1

13

4

Canada

76

5

73

111

36

8

3

Chile

21

17

55

24

8

19

6

China

13

11

40

10

3

9

3

Colombia

38

18

36

27

9

13

4

Congo  Dem. Rep.

13

57

59

16

5

67

22

Costa Rica

53

17

86

91

30

30

10

Denmark

4

49

64

6

2

63

21

Dominican Rep.

76

7

63

95

31

9

3

Egypt  Arab Rep.

18

38

53

19

6

41

13

Ethiopia

12

53

38

9

3

40

13

Fiji

10

4

115

22

7

9

3

Gambia

2

51

132

6

2

135

45

Ghana

12

40

60

15

5

48

16

Guinea

15

56

48

14

5

54

18

Guyana

28

12

211

120

39

50

16

Haiti

67

13

36

48

16

9

3

Honduras

52

17

91

95

31

31

10

Iceland

11

34

67

15

5

46

15

India

17

29

28

9

3

16

5

Indonesia

13

15

52

13

4

15

5

Iran  Islamic Rep.

1

40

36

1

0

29

10

Israel

25

38

69

34

11

52

17

Jamaica

53

9

136

145

48

24

8

Japan

27

12

17

9

3

4

1

Jordan

7

24

126

18

6

62

20

Kenya

6

35

73

9

3

50

17

Korea

22

11

67

30

10

14

5

Kuwait

19

24

104

39

13

51

17

Lao PDR

2

16

61

2

1

20

7

Lebanon

12

51

77

18

6

78

26

Madagascar

4

55

55

4

1

60

20

Malawi

8

26

73

12

4

37

12

Malaysia

17

10

194

68

22

40

13

Mauritania

5

60

112

11

4

134

44

Mauritius

1

36

122

2

1

87

29

Mexico

79

6

59

93

31

7

2

Mongolia

8

17

106

16

5

35

12

Morocco

5

59

61

6

2

72

24

Mozambique

7

22

88

13

4

40

13

Myanmar

3

5

3

0

0

0

0

Nepal

12

22

59

14

5

26

9

New Zealand

13

11

59

16

5

13

4

Nicaragua

38

16

91

69

23

29

10

Nigeria

35

34

30

21

7

21

7

Norway

6

43

70

9

3

61

20

Pakistan

12

20

36

9

3

15

5

Papua New Guinea

3

11

103

6

2

23

8

Paraguay

19

8

48

19

6

8

2

Peru

24

18

28

13

4

10

3

Philippines

24

10

81

39

13

16

5

Romania

4

62

59

5

2

73

24

Rwanda

23

50

36

16

5

36

12

Saudi Arabia

20

21

72

29

10

31

10

Seychelles

0

16

104

1

0

33

11

Sierra Leone

14

54

39

11

4

42

14

Singapore

16

10

356

114

38

71

24

South Africa

10

29

50

10

3

29

10

Sri Lanka

17

16

82

27

9

26

9

Sweden

8

48

76

12

4

72

24

Switzerland

8

61

66

11

3

81

27

Tanzania

6

26

63

7

2

33

11

Thailand

14

13

90

25

8

23

8

Trinidad & Tobago

42

9

97

81

27

18

6

Tunisia

3

75

93

5

2

141

46

Turkey

9

46

44

8

3

41

13

Uganda

4

58

32

2

1

38

12

United Kingdom

12

53

58

13

4

62

20

United States

n/a

14

24

n/a

n/a

7

2

Uruguay

9

18

38

7

2

14

5

Venezuela

50

10

48

48

16

10

3

Vietnam

4

16

83

6

2

26

9

Yemen  Rep.

7

13

73

10

3

18

6

Zambia

5

17

91

9

3

31

10

Zimbabwe

4

21

91

8

3

38

13

Average

4

48

69

5

2

54

18

 

 

 

 

 

 

 

 

Currency Boards

 

 

 

 

 

 

Argentina

16

23

17

5

2

8

3

Bulgaria

5

56

103

11

4

114

38

Djibouti

3

38

99

6

2

74

24

Hong Kong  China

16

10

303

97

32

63

21

 

 

 

 

 

 

 

 

Dollarized

 

 

 

 

 

 

 

Panama

12

7

199

47

15

27

9

 

 

 

 

 

 

 

 

Recent Dollarizers

 

 

 

 

 

 

Ecuador

45

16

58

53

17

19

6

El Salvador

50

14

59

59

19

16

5

Guatemala

44

10

45

39

13

9

3

 

 

 

 

 

 

 

 

EMU Members

 

 

 

 

 

 

Austria

4

69

78

6

2

108

36

Finland

7

35

68

10

3

48

16

France

6

56

45

5

2

50

17

Germany

7

46

46

6

2

43

14

Greece

7

64

43

6

2

56

18

Ireland

11

35

134

30

10

93

31

Italy

6

51

51

7

2

52

17

Netherlands

6

57

100

12

4

114

38

Portugal

4

67

74

5

2

99

33

Spain

5

61

47

5

2

57

19

 

 

 

 

 

 

 

 

Potential EMU Joiners

 

 

 

 

 

 

Hungary

4

71

76

6

2

107

35

Poland

3

60

50

3

1

61

20

 

 

 

 

 

 

 

 

CFA Franc Zone

 

 

 

 

 

 

Benin

5

45

63

6

2

57

19

Burkina Faso

4

71

41

3

1

59

19

Cameroon

3

69

46

3

1

63

21

Central African Republic

2

72

49

2

1

70

23

Chad

6

75

76

9

3

114

38

Comoros

2

70

64

2

1

89

29

Congo  Rep.

14

77

128

35

11

196

65

Cote d'Ivoire

7

73

77

11

4

112

37

Equatorial Guinea

21

45

154

66

22

137

45

Gabon

46

33

93

86

28

61

20

Guinea-Bissau

2

73

47

2

1

69

23

Mali

4

51

60

5

2

60

20

Niger

10

71

40

8

3

57

19

Senegal

5

69

69

6

2

95

31

Togo

6

42

75

9

3

63

21

 

 

 

 

 

 

 

 

Uses Indian Rupee

 

 

 

 

 

 

Bhutan

3

13

77

4

1

20

7

 

 

 

 

 

 

 

 

ECCA Member

 

 

 

 

 

 

St. Kitts and Nevis

21

2

123

51

17

6

2

 

 

 

 

 

 

 

 

Notes

 

 

 

 

 

 

 

1: Currency Union predicted to triple trade.

 

 

 

 

2: Each percentage point in trade/GDP predicted to increase real GDP per capita by .33%.

 

 
This is a longer version of Table V from Frankel and Rose “An Estimate of the Effect of Common Currencies on Trade and Income”