The Euro Cash Changeover, Inflation Perceptions and the Media

Michael Lamla and Sarah Lein

No 10-254, KOF Working papers from KOF Swiss Economic Institute, ETH Zurich

Abstract: In the aftermath of the euro cash changeover consumers' inflation perceptions rose substantially in the euro area countries while actual inflation figures remained almost unchanged. During that period media reporting on the potentially large inflationary effect of the euro introduction intensified. In this paper we argue that the information set of the public has been distorted through the significant slant in the media. Employing an unique dataset for Germany, we provide evidence that media reporting has a statistically significant and economically meaningful impact on inflation perceptions and contributed to their sharp rise in the aftermath of the euro cash changeover.

Pages: 34 pages
Date: 2010-02
New Economics Papers: this item is included in nep-cba, nep-cul, nep-eec, nep-mac and nep-mon
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:kof:wpskof:10-254

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