Kristóf Gyódi, Maciej Sobolewski and Michał Ziembiński
price convergence of 120 traded goods. While the Single European Act decreased price differences by 5%, the single currency increased it by 2%. However, the euro had different impact considering product categories- price convergence had been observed for cars, while divergence for food and tobacco. Baye et al . (2006) study the impact of euro on prices, using data collected from a price comparison site (Kelkoo). The data covers prices for 28 products across 7 EU countries. The authors find an increase of prices relative to the non-EU countries.
The observed cross