Open Access
Does One Currency Mean One Price?
Loading...
License
Access Rights
Cadmus Permanent Link
Full-text via DOI
ISBN
ISSN
1830-7728
Issue Date
Type of Publication
Keyword(s)
LC Subject Heading
Other Topic(s)
EUI Research Cluster(s)
Initial version
Published version
Succeeding version
Preceding version
Published version part
Earlier different version
Initial format
Author(s)
Citation
EUI MWP; 2008/21
Cite
WOLSZCZAK-DERLACZ, Joanna, Does One Currency Mean One Price?, EUI MWP, 2008/21 - https://hdl.handle.net/1814/8747
Abstract
European Monetary Union was expected to have many consequences for the economies
of participant countries. Theory suggested that through a higher volume of trade and
stronger competition in the Eurozone, a single currency would lead to a reduction in
price dispersion. As far as prices are concerned, two effects were expected: an
immediate effect due to the technical characteristics of the changeover process, and a
long-term one leading to price convergence. Both Euro effects are evaluated using
difference-in-difference (DD) methodology. DD estimation is commonly used in the
evaluation of the effects of policy programmes. Applied to the issue of introducing a
single currency, the Euro effects identified are the estimated differences in price
changes, price dispersion and convergence rates pre- and post-Euro between two groups
of countries: Euro and non-Euro.