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One currency, one price? Euro changeover-related inflation in Estonia

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  • Rõõm, Tairi
  • Meriküll, Jaanika

Abstract

This paper studies euro changeover-related inflation using disaggregated price level data. The difference-in-differences approach is used and the control group for the treatment country, Estonia, is built from 12 euro area countries. The Nielsen Company disaggregated price data are employed at product, brand and shop-type level. The results indicate that while the overall inflationary effect of euro adoption was modest, the effects were significantly different across various market segments. Changeover-related inflation was higher for products that were relatively cheaper than the euro area average. Inflationary effects were stronger in smaller shops. JEL Classification: D49, P46, E58

Suggested Citation

  • Rõõm, Tairi & Meriküll, Jaanika, 2014. "One currency, one price? Euro changeover-related inflation in Estonia," Working Paper Series 1732, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20141732
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    References listed on IDEAS

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    More about this item

    Keywords

    consumer behaviour; currency changeovers; euro; market concentration;
    All these keywords.

    JEL classification:

    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • P46 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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