The Euro-changeoverand Euro-inflation: Evidence from Eurostat's HICP

Marco Ercolani and Jayasri Dutta ()

Discussion Papers from Department of Economics, University of Birmingham

Abstract: Though anecdotal evidence suggests that retail price inflation increased temporarily in January 2002 when Euro notes and coins were introduced, the evidence from official statistics largely refutes this. We test for the presence of a sudden temporary increase in inflation for Euro-changeover countries. We use the countries that did not join the Euro: Denmark, Sweden and the UK; as a control group. Though the results are sensitive to the estimation method, we do uncover weak evidence of a minor increase in aggregate inflation in January 2002 for the countries that did join the Euro. Similar tests for the Restaurant sector find a strong Euro-changeover effect on temporary inflation. Summary tests for 129 other price sub-categories are also discussed.

JEL-codes: D12 D40 D84 E31 E52 E63 L89 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2006-02
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:bir:birmec:06-03

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