CEPII, Recherche et Expertise sur l'economie mondiale
Trade Prices and the Euro

Julien Martin
Isabelle Méjean

 Highlights :

 Abstract :
This paper describes the impact of the Euro on i) the level, ii) the evolution and iii) the dispersion of trade prices. This empirical analysis relies on firm level data about French exports over the period 1995-2005. We find that the elimination of exchange rate fluctuations reduces the pricing to market behavior of French exporters. At the beginning of the EMU, we also observe an increase in aggregate prices for sales in the Euro zone. This price increase does not compensate for the aggregate price gap between cheaper EMU markets and more expensive non-EMU countries. Last we find that the Euro has affected firms’ pricing strategies leading to a reduction of the price dispersion inside the Euro zone.

 Keywords : International trade | International trade prices | European monetary integration

 JEL : F12, F15
CEPII Working Paper
N°2008-29, December 2008

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