The Euro Changeover and Price Adjustments in Italy

Abstract

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 Italian economy.

Keywords: Euro changeover, staggered price adjustments, inflation

JEL Classification: C220, E310