The impact of the euro changeover on the price level in Greece
2007
Ali Mahfoudh, M.
The creation of the economic and monetary union in Europe hassled to the incurrence of significant effects on the economic area; one crucial aspect for the European consumer is the effect of the euro on prices. The purpose of this paper is to evaluate the impact of the introduction of the euro on the purchasing power of Greek consumers, pricing of food products, employment levels, household income, and GDP growth. There are a number of benefits to having a single European currency which were the major motivations behind the creation of the euro. Prices of food products in the euro-area saw an unprecedented increase after the introduction of the euro. The introduction of the euro created a huge domestic market which has transformed the trading and commercialization of food products for all organizations and businesses across the euro-area. The main assumption that we make in this paper is that the introduction of the euro on 1 January, 2002 in Greece, as in all the other countries who adopted the euro, forced all the industries to revaluate and adjust their prices. Despite the expectations of economists that the introduction of the euro will not affect prices, this study will aim to indicate that the Greek consumer has perceived the contrary.
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