The Euro Did Not Raise Prices in The EMU

Przemyslaw Wozniak

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Contrary to the general belief that the introduction of the euro raised the general price level in the EMU, Dr. Przemyslaw Wozniak argued on Wednesday 19 November during a CASE Policy Research Seminar that the euro had a price-dampening effect, especially on consumer goods. This argument is based on the conclusions that one currency enables greater price transparency, fosters cross-border trade, and increases competition in the EU market.  A more detailed analysis of the introduction of the euro in poorer EU countries (Greece, Italy, Spain, Portugal, and Slovenia) provides a comparative baseline scenario for New Member States seeking to join the EMU.