The euro impact on trade: long run evidence with structural breaks Camarero, Mariam Gómez-Herrera, Estrella Tamarit, Cecilio Gravity models Trade Panel cointegration Common factors Structural breaks Cross-section dependence In this paper we present new evidence on the euro effect on trade. We use a data set containing all bilateral combinations in a panel of 26 OECD countries during the period 1967-2008. From a methodological point of view, we implement a new generation of tests that allow solving some of the problems derived from the non-stationary nature of the data. To this aim we apply panel tests that account for the presence of cross-section dependence as well as discontinuities in the non-stationary panel data. We test for cointegration between the variables using panel cointegration tests, especially the ones proposed by Banerjee and Carrióni- Silvestre (2010). We also efficiently estimate the long-run relationships using the CUP-BC and CUP-FM estimators proposed in Bai et al. (2009). We argue that, after controlling for cross-section dependence and deterministic trends and breaks in trade integration, the euro appears to generate lower trade effects than predicted in previous studies. 2014-05-06T08:44:59Z 2014-05-06T08:44:59Z 2012 info:eu-repo/semantics/report Camarero, M.; Gómez-Herrera, E.; Tamarit, C. The euro impact on trade: long run evidence with structural breaks. Universidad de Granada. Departamento de Teoría e Historia Económica (2012). (The Papers; 10/27). [http://hdl.handle.net/10481/31580] http://hdl.handle.net/10481/31580 eng The Papers;10/27 http://creativecommons.org/licenses/by-nc-nd/3.0/ info:eu-repo/semantics/openAccess Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License Universidad de Granada. Departamento de Teoría e Historia Económica