Price Convergence Under Emu? First Estimates

University of St. Gallen, Economics Discussion Paper No. 2003-08

27 Pages Posted: 6 Jun 2003

See all articles by Matthias Lutz

Matthias Lutz

Swiss National Bank; University of St. Gallen

Date Written: March 2003


This paper examines whether European monetary union has lowered the degree of price dispersion among member countries. The difference-in-differences methodology is applied to four independent data sets containing prices of identical goods. While the results reported in the paper vary somewhat across goods, they provide little overall support of the European Commission's claim that the single currency would significantly deepen market integration among the euro-zone countries. Even though this should be viewed as preliminary evidence, it does suggest that there are other, more important impediments to market integration in the EU.

Keywords: EMU, price convergence, difference-in-differences

JEL Classification: F15, F33, F36

Suggested Citation

Lutz, Matthias, Price Convergence Under Emu? First Estimates (March 2003). University of St. Gallen, Economics Discussion Paper No. 2003-08, Available at SSRN: or

Matthias Lutz (Contact Author)

Swiss National Bank ( email )

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University of St. Gallen ( email )

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CH-9000 St. Gallen
+41/71/224 23 11 (Phone)

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