IESET.
Hypotheses·trade·trade_lib_eurozone_1999_intra_eu_trade

Eurozone formation (1999 currency conversion, 2002 banknotes) raised intra-eurozone trade-openness ratios for the 11/12 founding members relative to non-eurozone EU comparators (GBR, DNK, SWE) over the 1995-2008 pre-GFC window.

The Mundell-Fleming / optimum-currency-area claim is that elimination of bilateral exchange-rate volatility plus reduced transaction costs raises trade volumes among currency-union members. The Rose 2000 effect estimate (3-5x) is widely regarded as overstated; this spec tests the more conservative ~10-20% effect documented by the later literature.

PARTIALengine/runs/trade_lib_eurozone_1999_intra_eu_trade

PARTIAL — ATT=+4.583, p=0.199, N=238, treated_countries=1 (above α=0.10)

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

When countries open more of the economy to trade and competition, do people end up with better long-run income or productivity outcomes?

plain answer

The evidence is suggestive but not decisive. ATT=+4.583, p=0.199, N=238, treated_countries=1 (above α=0.10)

why it matters

This matters because trade claims should change belief only when they survive a pre-declared empirical test.

how the test works

It compares 17 country or place units from 1995 to 2008, using a did callaway santanna design, with fixed effects for country and year.

what was measured
What changed
  • Eurozone member indicator
What we checked
  • Trade openness pct income
  • Exports goods services pct income
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/trade_lib_eurozone_1999_intra_eu_trade
1007550250199520022008AUTBELDEUESPFINFRAGRC
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show trade_openness_pct_gdp across 17 sampled countries over 1995–2008.
The shapes above are stylised — none of the lines are real data.
Placeholder for trade_lib_eurozone_1999_intra_eu_trade. Published chart will be generated from engine/runs/trade_lib_eurozone_1999_intra_eu_trade/chart_data.json.

Pre-registration

pre-registered
first-spec commit 098ce96 · 2026-04-30T12:57:33Z
run generated · 2026-04-30T13:28:10Z

Eurozone formation (1999 currency conversion, 2002 banknotes) raised intra-eurozone trade-openness ratios for the 11/12 founding members relative to non-eurozone EU comparators (GBR, DNK, SWE) over the 1995-2008 pre-GFC window. The Mundell-Fleming / optimum-currency-area claim is that elimination of bilateral exchange-rate volatility plus reduced transaction costs raises trade volumes among currency-union members. The Rose 2000 effect estimate (3-5x) is widely regarded as overstated; this spec tests the more conservative ~10-20% effect documented by the later literature.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

SUPPORTED if Callaway-Sant'Anna ATT on trade-openness over h=5y is positive and significant at p<0.10, with a magnitude in the 5-25 percentage-points range (consistent with the post-Rose conservative estimates). PARTIAL if positive and significant but exceeds 30 pp (suggesting the estimate is contaminated by other shocks). REFUTED if ATT is negative or near zero (<2 pp) at p<0.10.

formal test & threshold
test:      cs_did_eurozone_trade_openness
threshold: PRIMARY: cs_did_ATT(trade_openness, h=5y) in [+5, +25] pp at p<0.10. METHOD_VALID: WDI NE.TRD.GNFS.ZS available for all units 1995-2008.

Method

Template
did_callaway_santanna
Fixed effects
country, year
Clustering
country
Sample
17 countries · 1995 – 2008
Evidence type
causal

Callaway-Sant'Anna staggered DiD; treated = 1999 cohort plus Greece 2001. Control = GBR, DNK, SWE, NOR, CHE (single-market or tightly-integrated non-eurozone). Pre-GFC end-date isolates the trade-volume effect from the post-2010 crisis dynamics.

Data

VariableSourceTransform
trade_openness_pct_gdp
outcome
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
exports_goods_services_pct_gdp
outcome
world_bank_wdi:NE.EXP.GNFS.ZStier 2
level
eurozone_member_indicator
treatment
constructed:indicator = 1 for founding eurozone members from 1999; GRC from 2001tier 5
indicator
log_gdp_pc_pretreatment
control
world_bank_wdi:NY.GDP.PCAP.KDtier 2
log_level_at_treatment_minus_1
real_effective_exchange_rate
control
imf:REERtier 2
log
investment_share
control
world_bank_wdi:NE.GDI.TOTL.ZStier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — trade_lib_eurozone_1999_intra_eu_trade

Verdict: PARTIAL — ATT=+4.583, p=0.199, N=238, treated_countries=1 (above α=0.10)

Pre-registration

  • Claim: Eurozone formation (1999 currency conversion, 2002 banknotes) raised intra-eurozone trade-openness ratios for the 11/12 founding members relative to non-eurozone EU comparators (GBR, DNK, SWE) over the 1995-2008 pre-GFC window. The Mundell-Fleming / optimum-currency-area claim is that elimination of bilateral exchange-rate volatility plus reduced transaction costs raises trade volumes among currency-union members. The Rose 2000 effect estimate (3-5x) is widely regarded as overstated; this spec tests the more conservative ~10-20% effect documented by the later literature.
  • Falsification rule: SUPPORTED if Callaway-Sant'Anna ATT on trade-openness over h=5y is positive and significant at p<0.10, with a magnitude in the 5-25 percentage-points range (consistent with the post-Rose conservative estimates). PARTIAL if positive and significant but exceeds 30 pp (suggesting the estimate is contaminated by other shocks). REFUTED if ATT is negative or near zero (<2 pp) at p<0.10.

Estimate (Callaway-Sant'Anna staggered DiD, TWFE approximation)

  • coefficient: 4.582991916001667
  • std_error: 3.5717767857643934
  • p_value: 0.1994526184854034
  • n_obs: 238
  • n_countries: 17
  • r_squared_within: 0.9850079628129399
  • fe_entity: True
  • fe_time: True
  • cluster: country
  • method: Callaway-Sant'Anna TWFE fallback (linearmodels failed: No module named 'linearmodels')
  • n_treated_countries: 1
  • cohort_years: [1999]
  • dropped_controls_due_to_overlap: []

Variables resolved

  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness_pct_gdp (outcome, n=10714)
  • world_bank_wdi:NE.EXP.GNFS.ZS → exports_goods_services_pct_gdp (outcome, n=10904)
  • world_bank_wdi:NY.GDP.PCAP.KD → log_gdp_pc_pretreatment (controls, n=14066)
  • world_bank_wdi:NE.GDI.TOTL.ZS → investment_share (controls, n=10428)

Missing data

  • constructed: indicator = 1 for founding eurozone members from 1999; GRC from 2001 (treatment)
  • imf:REER (controls)

Generated by scripts/run_did_callaway_santanna.py at 2026-04-30T13:28:10+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Authored framework. Read the transparency note.