The Inflationary Consequences of a Currency Changeover: Evidence from the Michelin Red Guide

23 Pages Posted: 25 Jul 2003

See all articles by Giancarlo Marini

Giancarlo Marini

University of Rome Tor Vergata - Faculty of Economics

Fabrizio Adriani

University of Rome Tor Vergata - Centre for International Studies on Economic Growth (CEIS)

Pasquale Scaramozzino

University of Rome II - Faculty of Economics; University of London - School of Oriental and African Studies (SOAS); University of London - Centre for Financial and Management Studies (CeFIMS)

Date Written: July 2003

Abstract

This paper examines the inflationary consequences of a currency changeover in a simple model of the catering market. It is shown that the change in cash denomination acts as a coordination device shifting the industry to a high-price equilibrium. Empirical evidence based on data from the Michelin Red Guide strongly supports the predictions of our model against competing explanations. A permanent change in relative prices has taken place in Euroland, with strong redistributional effects in favour of some segments of the catering sector.

Suggested Citation

Marini, Giancarlo and Adriani, Fabrizio and Scaramozzino, Pasquale, The Inflationary Consequences of a Currency Changeover: Evidence from the Michelin Red Guide (July 2003). Available at SSRN: https://ssrn.com/abstract=428522 or http://dx.doi.org/10.2139/ssrn.428522

Giancarlo Marini (Contact Author)

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, 00100
Italy

Fabrizio Adriani

University of Rome Tor Vergata - Centre for International Studies on Economic Growth (CEIS) ( email )

Via Columbia, 2
I-00133 Rome
Italy

Pasquale Scaramozzino

University of Rome II - Faculty of Economics ( email )

Via Columbia n.2
Rome, 00100
Italy

University of London - School of Oriental and African Studies (SOAS) ( email )

Thornhaugh Street
Russell Square: College Buildings 541
London, WC1H 0XG
United Kingdom

University of London - Centre for Financial and Management Studies (CeFIMS)

Thornhaugh Street
London, WC1H 0XG
United Kingdom

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