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One Currency, One Price? Euro Changeover-Related Inflation in Estonia

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  • Jaanika Meriküll
  • Tairi Rõõm

Abstract

This article investigates euro changeover-related inflation using disaggregated price-level data. The differences-in-differences approach is used, and the control group for the treatment country, Estonia, is built from 12 eurozone countries. The Nielsen Company disaggregated price data are employed at product, brand and shop-type levels. 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 eurozone average. Inflationary effects were stronger in smaller shops.

Suggested Citation

  • Jaanika Meriküll & Tairi Rõõm, 2015. "One Currency, One Price? Euro Changeover-Related Inflation in Estonia," Journal of Common Market Studies, Wiley Blackwell, vol. 53(4), pages 822-839, July.
    • Handle: RePEc:bla:jcmkts:v:53:y:2015:i:4:p:822-839
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    More about this item

    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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