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Price Convergence under EMU? First Estimates

In: The Past, Present and Future of the European Union

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  • Matthias Lutz

    (University of St. Gallen)

Abstract

Does a common currency lead to greater market integration? Certainly European policy-makers seemed to be convinced that it does, when they set out on the Maastricht agenda to create the economic and monetary union (EMU). Despite considerable scepticism throughout the first two stages, the third and final stage of monetary union started successfully in 1999, when the exchange rates of the participating countries were permanently fixed against the euro. This chapter examines to what extent price differences in the eurozone narrowed as a result of the introduction of the single currency: has ‘one money’ really supported the creation of ‘one market’?

Suggested Citation

  • Matthias Lutz, 2004. "Price Convergence under EMU? First Estimates," International Economic Association Series, in: Alan V. Deardorff (ed.), The Past, Present and Future of the European Union, chapter 4, pages 48-73, Palgrave Macmillan.
    • Handle: RePEc:pal:intecp:978-0-230-52286-2_4
    DOI: 10.1057/9780230522862_4
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    More about this item

    Keywords

    Price Difference; Monetary Union; Market Integration; Common Currency; Price Series;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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