EEG UMinho & Online
Joana Garcia is an Economist at the Research Department of Banco de Portugal since 2014. She is a PhD student and researcher of NIPE since 2021. Her thesis is advised by Fernando Alexandre (NIPE) and João Amador (Nova SBE and Banco Portugal). Her main research interests are in international trade and public economics.
Despite the increasingly important role of services in international trade, the literature studying the determinants of currency choices in these transactions focuses exclusively on trade in goods. Relying on a novel dataset detailing the currency used by Portuguese firms in extra and intra-EU services and goods trade, we offer new evidence about currency choices in services transactions and assess to what extent there are meaningful differences relative to goods trade. Our results are consistent with a key role of complementarities in price setting and input-output linkages in shaping currency choices both in goods and in services trade. Moreover, our findings indicate that those two mechanisms contribute to a less prevalent role of the US dollar in services trade that does not involve the US than in goods trade.
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