The widely-held hypothesis that accession to the EMU has caused a structural increase in Greek consumer prices is tested. No econometric evidence of such an effect is found. There is strong evidence of (a) multiple structural breaks in the process driving Greek equilibrium consumer prices and (b) non-linear price adjustment. The findings explain the post-EMU accession acceleration in Greek prices as normal, equilibrium-restoring behaviour. They also have important policy implications for the countries planning to join the euro in the foreseeable future.
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Article provided by Taylor and Francis Journals in its journal Applied Economics.
Volume (Year): 39 (2007) Issue (Month): 4 () Pages: 493-503 Download reference. The following formats are available: HTML,
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