Transitional Price Rises with the Adoption of the Euro: Aggregate and Disaggregate Sector Evidence
This paper presents a time-series regression analysis of price in ation at the time of the euro currency changeover in January 2002. Cross-equation tests on twelve euro countries and three non-euro EU countries are used to identify signi cant changes in in ation around that time. For a small number of prod- uct and service categories (mainly small-scale service industries), higher than expected in ation immediately after the euro currency changeover suggest the possible existence of menu costs, sellers' rounding up of prices or buyers' tem- porary rational inattention. However, the lack of evidence for reduced in ation immediately prior to the euro changeover suggests menu costs are not impor- tant.
|Date of creation:||Dec 2009|
|Date of revision:|
|Contact details of provider:|| Postal: Edgbaston, Birmingham, B15 2TT|
Web page: http://www.economics.bham.ac.uk
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bart Hobijn & Federico Ravenna & Andrea Tambalotti, 2006.
"Menu Costs at Work: Restaurant Prices and the Introduction of the Euro,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 121(3), pages 1103-1131.
- Bart Hobijn & Andrea Tanbalotti & Federico Ravenna, 2005. "Menu Costs at Work: Restaurant Prices and the Introduction of the Euro," 2005 Meeting Papers 659, Society for Economic Dynamics.
- Bart Hobijn & Federico Ravenna & Andrea Tambalotti, 2004. "Menu costs at work: restaurant prices and the introduction of the euro," Staff Reports 195, Federal Reserve Bank of New York.
- Angelini, Paolo & Lippi, Francesco, 2005.
"Did Inflation Really Soar After the Euro Cash Changeover? Indirect Evidence from ATM Withdrawals,"
CEPR Discussion Papers
4950, C.E.P.R. Discussion Papers.
- Paolo Angelini & Francesco Lippi, 2006. "Did inflation really soar after the euro cash changeover? Indirect evidence from ATM withdrawals," Temi di discussione (Economic working papers) 581, Bank of Italy, Economic Research and International Relations Area.
- Eugenio Gaiotti & Francesco Lippi, 2005.
"Pricing behavior and the introduction of the euro: evidence from a panel of restaurants,"
0501029, EconWPA, revised 15 Feb 2005.
- Gaiotti, Eugenio & Lippi, Francesco, 2005. "Pricing Behaviour and the Introduction of the Euro: Evidence from a Panel of Restaurants," CEPR Discussion Papers 4893, C.E.P.R. Discussion Papers.
- Giancarlo Marini & Fabrizio Adriani & Pasquale Scaramozzino, 2003.
"The Inflationary Consequences of a Currency Changeover: Evidence from the Michelin Red Guide,"
CEIS Research Paper
27, Tor Vergata University, CEIS.
- Fabrizio Adriani & Giancarlo Marini & Pasquale Scaramozzino, 2004. "The Inflationary Consequences Of A Currency Changeover: Evidence From The Michelin Red Guide," Royal Economic Society Annual Conference 2004 45, Royal Economic Society.
- Giovanni Mastrobuoni & Wioletta Dziuda, 2005.
"The Euro Changeover and its Effects on Price Transparency and Inflation,"
Carlo Alberto Notebooks
26, Collegio Carlo Alberto, revised 2006.
- Wioletta Dziuda & Giovanni Mastrobuoni, 2009. "The Euro Changeover and Its Effects on Price Transparency and Inflation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(1), pages 101-129, 02.
- C.K. Folkertsma & C. van Renselaar & A.C.J. Stokman, 2002. "Smooth Euro Changeover, Higher Prices? Results of a Survey Among Dutch Retailers," WO Research Memoranda (discontinued) 682, Netherlands Central Bank, Research Department.
- V. Bhaskar, 1998.
"On Endogenously Staggered Prices,"
- Sims, Christopher A., 2003. "Implications of rational inattention," Journal of Monetary Economics, Elsevier, vol. 50(3), pages 665-690, April.
- C.K. Folkertsma, 2001. "The Euro and Psychological Prices: Simulations of the Worst-Case Scenario," WO Research Memoranda (discontinued) 659, Netherlands Central Bank, Research Department.
- Kozicki, Sharon & Hoffman, Barak, 2004. "Rounding Error: A Distorting Influence on Index Data," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(3), pages 319-38, June.
- Carlos Coimbra & Daniel Santos & Rui Evangelista & Teresa Nascimento, 2002. "Analysis on the Impact of the Conversion of Escudos into Euros," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.
- Elliot D. Williams, 2006. "The Effects of Rounding on the Consumer Price Index," Working Papers 397, U.S. Bureau of Labor Statistics.
When requesting a correction, please mention this item's handle: RePEc:bir:birmec:09-18. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Colin Rowat)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.