This paper attempts to forecast the EU-Romania trade using the gravity approach developed in Ferragina, Giovannetti and Pastore (2005). The trade potential of Romania with five EU members (France, Germany, Italy, Spain and UK) is computed using an “out-of-sample” methodology for the period 1995-2001. The coefficients are taken from panel estimators of the gravity equation relative to intra-EU15 trade. The analysis suggests the existence of an important unexploited trade potential with Romania, which, nonetheless, is not much greater in size than that of the new EU members of Eastern Europe. The potential to actual trade ratio ranges from 2.2 to 2.7 and is sharply declining, suggesting that further dramatic economic integration is to be expected in the near future. Romania’s accession is likely to further push the process of economic integration.
"Forecasting EU-Romania Trade by Gravity Analysis"
FERRAGINA, Anna Maria;PASTORE, FRANCESCO
2005-01-01
Abstract
This paper attempts to forecast the EU-Romania trade using the gravity approach developed in Ferragina, Giovannetti and Pastore (2005). The trade potential of Romania with five EU members (France, Germany, Italy, Spain and UK) is computed using an “out-of-sample” methodology for the period 1995-2001. The coefficients are taken from panel estimators of the gravity equation relative to intra-EU15 trade. The analysis suggests the existence of an important unexploited trade potential with Romania, which, nonetheless, is not much greater in size than that of the new EU members of Eastern Europe. The potential to actual trade ratio ranges from 2.2 to 2.7 and is sharply declining, suggesting that further dramatic economic integration is to be expected in the near future. Romania’s accession is likely to further push the process of economic integration.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
