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In search of a euro effect: Big lessons from a Big Mac Meal?

  • Parsley, David
  • Wei, Shang-Jin

Was the adoption of the euro accompanied by an increase in prices? Did it promote goods market arbitrage in the form of faster convergence to a common price? By comparing the experience of eurozone countries to non-euro European countries in a 'difference-in-differences' specification, we net out effects on prices unrelated to the euro. We find neither evidence of significant price increases associated with the euro, nor evidence of a significant improvement in market integration.

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File URL: http://www.sciencedirect.com/science/article/pii/S0261-5606(07)00137-4
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Article provided by Elsevier in its journal Journal of International Money and Finance.

Volume (Year): 27 (2008)
Issue (Month): 2 (March)
Pages: 260-276

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Handle: RePEc:eee:jimfin:v:27:y:2008:i:2:p:260-276
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30443

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