This paper studies whether menu costs are large enough to explain why firms are so reluctant to change their prices. Without actually estimating menu costs, we can infer their relevance for firms' price setting decisions from observed pricing behavior around a currency changeover. At a currency...

This paper documents the existence of large structural breaks in the unconditional correlations among the British pound, Norwegian krone, Swedish krona, Swiss franc, and euro exchange rates (against the US dollar) during the period 1994-2003. Using the framework of dynamic conditional...

Vor der Einführung des Euro-Bargeldes war die Zustimmung zum Euro in Deutschland im Vergleich zu den anderen an der Währungsunion teilnehmenden Ländern gering. Nach der Bargeldeinführung war zunächst eine Euro-Begeisterung zu verzeichnen, die in den folgenden Wochen allerdings wieder etwas...

Schon vor Beginn der Währungsunion wurden von der Einführung des Euro kräftige Impulse für den Handel zwischen den beteiligten Mitgliedstaaten erwartet, da der Wegfall von Wechselkursschwankungen die Planungssicherheit für grenzüberschreitende Handels- und Investitionsaktivitäten erhöhen...

By estimating a staggered price model over the period 1980q1-2010q2, this paper documents that, after the euro changeover, Italian retailers have increased the number of price adjustments, which has translated into a higher inflation rate, with a detrimental effect on the competitiveness of the...

Following the Euro changeover in January 2002, consumers across the Euro Area perceived a sharp rise in inflation, in contrast to official figures. Several theories have been advanced to explain this apparent economic illusion, but they struggle to account for its striking scale and persistence....

Tübinger Diskussionsbeitrag Nr. 154, Dezember 1998

This paper studies the long-run effect of the 2002 changeover on restaurant prices in Germany. German restaurant prices increased significantly when the euro was introduced as a new currency but rather than returning to their re-changeover trend, restaurant prices appear to have stabilized on a...

Many Europeans today ask why the European Community chose the bold strategy of pursuing an Economic and Monetary Union at a time when a number of political and economic issues had not yet been resolved. Many economists like to think that the economic case for EMU was weak and that the decision...