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Smooth Euro Changeover, Higher Prices? Results of a Survey Among Dutch Retailers

Author

Listed:
  • C.K. Folkertsma
  • C. van Renselaar
  • A.C.J. Stokman

Abstract

The Dutch changeover to euro banknotes and coins proceeded both remarkably smoothly and rapidly. After one week, over 90% of all cash payments were being made in euro. Fears of the payment system breaking down, always rampant among businesses and the public alike, did not materialise. Fears of price rises on the other hand, were not entirely unfounded, as evidenced by a survey held by the Bank among retailers in January. The changeover from guilders to euro has pushed consumer prices up by 0.2-0.4%, in part because retailers passed the ensuing costs on to their customers, but also because prices were rounded up towards attractive euro prices. In time, the introduction of the euro willpresumably lead to lower prices.

Suggested Citation

  • 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.
  • Handle: RePEc:dnb:wormem:682
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    File URL: https://www.dnb.nl/binaries/wo0682_eng_tcm46-145979.pdf
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    Citations

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    Cited by:

    1. Stokman, Ad C.J. & Hoeberichts, Marco M., 2006. "Price setting behaviour in the Netherlands: results of a survey," Working Paper Series 607, European Central Bank.
    2. 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.
    3. Marco Hoeberichts & Ad Stokman, 2010. "Price setting behaviour in the Netherlands: results of a survey," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(2-3), pages 135-149.
    4. Lünnemann, Patrick & Mathä, Thomas Y., 2005. "Consumer price behaviour in Luxembourg: evidence from micro CPI data," Working Paper Series 541, European Central Bank.
    5. Marco Ercolani, 2010. "Transitional price rises with the adoption of the euro: aggregate and disaggregate sector evidence," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 13(2), pages 137-157.
    6. Luc Aucremanne & Marianne Collin & Thomas Stragier, 2007. "Assessing the Gap between Observed and Perceived Inflation in the Euro Area : Is the Credibility of the HICP at Stake ?," Working Paper Research 112, National Bank of Belgium.
    7. Knotek II, Edward S., 2008. "Convenient prices, currency, and nominal rigidity: Theory with evidence from newspaper prices," Journal of Monetary Economics, Elsevier, vol. 55(7), pages 1303-1316, October.
    8. Ehrmann, Michael, 2006. "Rational inattention, inflation developments and perceptions after the euro cash changeover," Working Paper Series 588, European Central Bank.
    9. Thomas A. Eife, 2006. "Price setting behaviour and price setting regulations at the euro changeover," Bank of Estonia Working Papers 2006-06, Bank of Estonia, revised 12 Oct 2006.
    10. Michael Ehrmann, 2011. "Inflation Developments and Perceptions after the Euro Cash Changeover," German Economic Review, Verein für Socialpolitik, vol. 12(1), pages 33-58, February.
    11. Rõõm, Tairi & Meriküll, Jaanika, 2014. "One currency, one price? Euro changeover-related inflation in Estonia," Working Paper Series 1732, European Central Bank.
    12. Jaanika Merikull & Tairi Room, 2014. "One currency, one price? Euro Changeover related inflation in Estonia," Bank of Estonia Working Papers wp2014-7, Bank of Estonia, revised 10 Oct 2014.

    More about this item

    Keywords

    Euro cash-changeover; survey; price impact of cash-changeover;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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