662 - The impact of the euroconversion on prices. Part II: an empirical investigation for The Netherlands

Wetenschappelijke publicatie
Date 1 July 2001

A majority of Dutch households fear that the conversion to the euro will be attended by extra price increases. Last March, the Bank initiated an investigation in order to assess whether this fear is justified. On the basis of an inventory of economic arguments and, to a certain degree, comparable historical experiences it was concluded that there is no direct cause for concern. Next to this general assessment, the present report takes a closer look at the potential price effects due to the euroconversion in the Netherlands. A detailed study on a large set of individual prices in combination with a survey among retailers about their price setting behaviour sheds light on the role of psychological prices. Furthermore, the report looks into the possible effects on Dutch consumer prices if the euroconversion costs are passed through. Key words: euroconversion, price effects