Arbeitspapier
Common Currency, Common Market?
Does the common currency promote goods market integration within the EMU? We argue that such an effect is likely, but that the mechanism typically proposed lover costs of arbitrage because of increased price transparency is likely to be of minor importance. Instead we sketch a duopoly model which stresses that lover possibility of future real exchange rate variability lowers the option value of being able to price discriminate. The euro would promote market integration because it is less valuable for firms to segment markets. In addition we argue that fairness concerns and less risk associated with third party arbitrage may be potentially important.
- Language
-
Englisch
- Bibliographic citation
-
Series: IEHAS Discussion Papers ; No. MT-DP - 2003/5
- Classification
-
Wirtschaft
Trade Policy; International Trade Organizations
Economic Integration
Open Economy Macroeconomics
Antitrust Issues and Policies: General
- Subject
-
exchange rate pass-through
law of one price
EMU
price discrimination
price transparency
real options
- Event
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Geistige Schöpfung
- (who)
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Friberg, Richard
- Event
-
Veröffentlichung
- (who)
-
Hungarian Academy of Sciences, Institute of Economics
- (where)
-
Budapest
- (when)
-
2003
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Friberg, Richard
- Hungarian Academy of Sciences, Institute of Economics
Time of origin
- 2003
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