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The welfare impact of Euro on European consumers

Author

Listed:
  • Affuso, Ermanno
  • Buleca, Jan
  • Zhang, Dengjun
  • Zoricak, Martin

Abstract

This research uses a Quadratic Almost Ideal Demand System, combined with a Difference-in-Differences model with time-varying staggered treatments, to assess the impact of the European common currency on consumers’ welfare. Based on a panel of 29 European Union member countries from 1996 to 2022, results indicate that consumers in the Eurozone lost between 1.13% and 2.26% in annual per capita consumer welfare after adopting the euro.

Suggested Citation

  • Affuso, Ermanno & Buleca, Jan & Zhang, Dengjun & Zoricak, Martin, 2023. "The welfare impact of Euro on European consumers," Finance Research Letters, Elsevier, vol. 56(C).
    • Handle: RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323005135
    DOI: 10.1016/j.frl.2023.104141
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    References listed on IDEAS

    as
    1. Groll, Dominik & Monacelli, Tommaso, 2020. "The inherent benefit of monetary unions," Journal of Monetary Economics, Elsevier, vol. 111(C), pages 63-79.
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    More about this item

    Keywords

    Consumer welfare; Demand analysis; Difference-in-differences; Euro; Monetary union;
    All these keywords.

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E49 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Other

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