654 - How does the introduction of the euro affect prices? Part I: a survey of arguments

Wetenschappelijke publicatie
Date 1 May 2001

In this paper we discuss whether the introduction of the euro may cause price changes. Besides a critical survey of the theoretical arguments supporting price effects, we discuss the empirical evidence on price effects obtained from comparable events. Neither the theoretical arguments nor the empirical findings convincingly support the view that the introduction of the euro will cause a significant rise in prices. Moreover, in the medium term, the introduction of the euro may even lead to lower prices. Key words: euro introduction, inflation