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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)

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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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Publisher 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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Related research
Keywords: Producer prices; Relative prices; Price convergence; Euro; Balassa-Samuelson;

Find related papers by JEL classification:
E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
F15 - International Economics - - Trade - - - Economic Integration
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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