European Product Market Integration after the Euro

37 Pages Posted: 11 Jul 2004

See all articles by Charles M. Engel

Charles M. Engel

University of Wisconsin - Madison - Department of Economics; National Bureau of Economic Research (NBER); University of Washington - Department of Economics

John H. Rogers

Board of Governors of the Federal Reserve System - Trade and Financial Studies Section

Abstract

Using a detailed data set of prices of consumer goods in European cities from 1990 to Spring 2003, we investigate the question of whether the introduction of the euro in January 1999 increased integration of consumer markets as reflected by consumer prices. In fact, we find no tendency for prices to converge after January 1999. This finding holds even when we control for a number of factors that might affect price dispersion. On the other hand, we find that there has been a significant reduction in price dispersion throughout the decade of the 1990s, suggesting that efforts to reduce economic barriers initiated early in the decade may have in fact had the effect of significantly increasing the integration of consumer markets.

Suggested Citation

Engel, Charles M. and Rogers, John H., European Product Market Integration after the Euro. Economic Policy, Vol. 19, No. 39, pp. 347-384, July 2004. Available at SSRN: https://ssrn.com/abstract=559628

Charles M. Engel (Contact Author)

University of Wisconsin - Madison - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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University of Washington - Department of Economics ( email )

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John H. Rogers

Board of Governors of the Federal Reserve System - Trade and Financial Studies Section ( email )

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Washington, DC 20551
United States
202-452-2873 (Phone)
202-736-5638 (Fax)

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