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One Market, One Money, One Price?

Author

Listed:
  • Nigel F.B. Allington

    (Gonville and Caius College, University of Cambridge, and Cardiff University)

  • Paul A. Kattuman

    (Judge Business School and Corpus Christi College, University of Cambridge)

  • Florian A. Waldmann

    (Citigroup Global Markets, London and Wolfson College, University of Cambridge)

Abstract

The introduction of the euro was intended to integrate markets within Europe further, after the implementation of the 1992 Single Market Project. We examine the extent to which this objective has been achieved, by examining the degree of price dispersion between countries in the euro zone, compared to a control group of EU countries outside the euro zone. We also establish the role of exchange rate risk in hampering arbitrage by estimating the euro effect for subgroups within the euro zone, utilizing differences among EU countries in participation in the Exchange Rate Mechanism. Our results, in contrast with previous empirical research, suggest robustly that the euro has had a significant integrating effect.

Suggested Citation

  • Nigel F.B. Allington & Paul A. Kattuman & Florian A. Waldmann, 2005. "One Market, One Money, One Price?," International Journal of Central Banking, International Journal of Central Banking, vol. 1(3), December.
    • Handle: RePEc:ijc:ijcjou:y:2005:q:4:a:3
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • F01 - International Economics - - General - - - Global Outlook

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