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The Effect of the Euro Changeover on Prices: Evidence from Lithuania

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  • Valentin Jouvanceau

    (Bank of Lithuania)

Abstract

At the aggregate level, I find that the euro changeover did not lead to a significant change in the overall inflation rate between 2015 and 2019 in Lithuania. When the measures are diversified, however, some inflationary effects emerge in sub-categories. I therefore analyze this heterogeneity at the disaggregated level using a large sample of prices that constitutes the CPI from 2010 to 2018. I show that significant price changes have been confined to the low-weighted components of the HICP. This explains why a spike in the overall price level did not occur at the time of the changeover.

Suggested Citation

  • Valentin Jouvanceau, 2021. "The Effect of the Euro Changeover on Prices: Evidence from Lithuania," Bank of Lithuania Working Paper Series 93, Bank of Lithuania.
    • Handle: RePEc:lie:wpaper:93
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    References listed on IDEAS

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    More about this item

    Keywords

    Euro changeover; synthetic difference-in-differences; regression discontinuity in time; price changes.;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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