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LÂ’introduzione dellÂ’euro e la divergenza tra infl azione rilevata e percepita

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Author Info

  • Paolo Del Giovane

    ()
    (Banca d'Italia)

  • Roberto Sabbatini

    ()
    (Banca d'Italia)

Abstract

Following the introduction of euro banknotes and coins many Italians perceived a much sharper increase in the price level than the moderate rise registered by the National Institute of Statistics. The paper shows that the apparent contradiction between the publicÂ’s perceptions and officially measured inflation stems mainly from the fact that the former often refer to phenomena not captured by the inflation rate calculated for the average basket of goods and services for the whole population. The rise in perceived inflation can be largely explained by the generally stronger influence that large, upward, and frequently observed price movements exert on consumersÂ’ perceptions, together with the actual behaviour of prices in the period following the currency changeover, which saw many price changes, with larger increases for the more frequently purchased products and exceptional rises for some items. The reciprocal influence between inflation perceptions and the mediaÂ’s unusually extensive coverage of price developments on the occasion of the changeover also appears to have been important. Lastly, the perception of a substantial loss of purchasing power, especially on the part of the least-well-off households, can be traced to economic phenomena that do not bear directly on official inflation but which it is hard for households to consider separately, such as the evolution of incomes and increases in the price of housing, not included in the official index.

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Bibliographic Info

Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 532.

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Date of creation: Dec 2004
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Handle: RePEc:bdi:wptemi:td_532_04

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Keywords: inflazione; euro; percezioni;

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References

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  1. Domenica J. Marchetti, 1999. "Markup and the Business Cycle: Evidence from Italian Manufacturing Branches," Temi di discussione (Economic working papers) 362, Bank of Italy, Economic Research and International Relations Area.
  2. Anthony B. Atkinson & Andrea Brandolini, 2000. "Promise and Pitfalls in the Use of 'Secondary' Data-Sets: Income Inequality in OECD Countries," Temi di discussione (Economic working papers) 379, Bank of Italy, Economic Research and International Relations Area.
  3. Marchetti, D.J., 1999. "Markup and the Business Cycle: Evidence from Italian Manufacturing Branches," Papers 362, Banca Italia - Servizio di Studi.
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Cited by:
  1. Boeri, Tito & Brandolini, Andrea, 2005. "The Age of Discontent: Italian Households at the Beginning of the Decade," IZA Discussion Papers 1530, Institute for the Study of Labor (IZA).
  2. Lyziak, Tomasz, 2009. "Measuring consumer inflation expectations in Europe and examining their forward-lookingness," MPRA Paper 18890, University Library of Munich, Germany.
  3. Wioletta Dziuda & Giovanni Mastrobuoni, 2009. "The Euro Changeover and Its Effects on Price Transparency and Inflation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(1), pages 101-129, 02.
  4. Massimo Baldini, 2005. "Inflation inequality in Italy," Center for the Analysis of Public Policies (CAPP) 0008, Universita di Modena e Reggio Emilia, Dipartimento di Economia Politica.

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