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Smooth Euro Changeover, Higher Prices? Results of a Survey Among Dutch Retailers

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Author Info
C.K. Folkertsma
C. van Renselaar
A.C.J. Stokman

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Abstract

The Dutch changeover to euro banknotes and coins proceeded both remarkably smoothly and rapidly. After one week, over 90% of all cash payments were being made in euro. Fears of the payment system breaking down, always rampant among businesses and the public alike, did not materialise. Fears of price rises on the other hand, were not entirely unfounded, as evidenced by a survey held by the Bank among retailers in January. The changeover from guilders to euro has pushed consumer prices up by 0.2-0.4%, in part because retailers passed the ensuing costs on to their customers, but also because prices were rounded up towards attractive euro prices. In time, the introduction of the euro willpresumably lead to lower prices.

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Paper provided by Netherlands Central Bank, Research Department in its series WO Research Memoranda (discontinued) with number 682.

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Date of creation: 2002
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Handle: RePEc:dnb:wormem:682

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Related research
Keywords: Euro cash-changeover; survey; price impact of cash-changeover;

Find related papers by JEL classification:
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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Cited by:
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  1. Patrick Lünnemann & Thomas Y. Mathä, 2005. "Consumer price behaviour in Luxembourg - evidence from micro CPI data," Working Paper Series 541, European Central Bank. [Downloadable!]
    Other versions:
  2. Thomas A. Eife, 2006. "Price setting behaviour and price setting regulations at the euro changeover," Bank of Estonia Working Papers 2006-06, Bank of Estonia, revised 12 Oct 2006. [Downloadable!]
  3. Michael Ehrmann, 2006. "Rational inattention, inflation developments and perceptions after the euro cash changeover," Working Paper Series 588, European Central Bank. [Downloadable!]
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