TY  - JOUR
AU  - Goldberg, Linda
TI  - Trade Invoicing in the Accession Countries: Are They Suited to the Euro?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11653
PY  - 2005
Y2  - October 2005
DO  - 10.3386/w11653
UR  - http://www.nber.org/papers/w11653
L1  - http://www.nber.org/papers/w11653.pdf
N1  - Author contact info:
Linda S. Goldberg
Federal Reserve Bank-New York
33 Liberty Street
New York, NY 10045
Tel: 212/720-2836
Fax: 212/720-6831
E-Mail: linda.goldberg@ny.frb.org
M1  - published as Linda S. Goldberg. "Trade Invoicing in the Accession Countries: Are They Suited to the Euro?," in Jeffrey A. Frankel and Christopher Pissarides, editors, "NBER International Seminar on Macroeconomics 2005" MIT Press (2007)

AB  - 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.
ER  -