The Inflationary Consequences of a Currency Changeover: Evidence from the Michelin Red Guide
Fabrizio Adriani and
CEIS Research Paper from Tor Vergata University, CEIS
This paper examines the inflationary consequences of a currency changeover in a simple model of the catering market. It is shown that the change in cash denomination acts as a coordination device shifting the industry to a high-price equilibrium. Empirical evidence based on data from the Michelin Red Guide strongly supports the predictions of our model against competing explanations. A permanent change in relative prices has taken place in Euroland, with strong redistributional effects in favour of some segments of the catering sector.
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Working Paper: The Inflationary Consequences Of A Currency Changeover: Evidence From The Michelin Red Guide (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:rtv:ceisrp:27
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CEIS - Centre for Economic and International Studies - Faculty of Economics - University of Rome "Tor Vergata" - Via Columbia, 2 00133 Roma
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