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Producer Prices in the Transition to a Common Currency

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Author Info

  • Andrén, Niclas

    ()
    (Institute of Economic Research)

  • Oxelheim, Lars

    ()
    (Research Institute of Industrial Economics)

Abstract

We analyze producer price developments in the transition from a national exchange rate regime to a monetary union. The focus is on the European Economic and Monetary Union (EMU). Stylized facts witness about an exploding gaps in producer-price inflation during the years immediately following the completion of the EMU. Price convergence is found to be an important driver throughout the entire euro period (1999-2005), but with no significant differences in speed compared to the pre euro period. Productivity growth had its primary effect in the first years and effective exchange-rate changes in the later years of the euro period.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 668.

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Length: 48 pages
Date of creation: 22 Sep 2006
Date of revision:
Handle: RePEc:hhs:iuiwop:0668

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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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Keywords: Producer prices; Relative prices; Price convergence; Euro; Balassa-Samuelson;

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References

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Cited by:
  1. Christian Dreger & Konstantin Kholodilin & Kirsten Lommatzsch & Jiri Slacalek & Przemyslaw Wozniak, 2007. "Price Convergence in the Enlarged Internal Market," Discussion Papers of DIW Berlin 730, DIW Berlin, German Institute for Economic Research.

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