Re: The upcoming introduction of the Euro

[Girard <bgirard@xxxxxxxxxxxx>]

I would like to add something else that has to do with taxes. People who
don't pay their taxes usually avoid banks, they keep cash, especially
when they use it in their business day to day transactions (shopkeepers,
doctors?). When the euro comes they will have to choose between :
- spending this cash,
- or changing it with the risk of being taxed.
This should affect consumption. We already saw that in Paris during the
last sales.

Jesus Ferreiro a *crit :
>
> Some effects can be expected depending of the round-up of domestic prices
> in euros.
>
> Imagine an item whose price in Spanish pesetas is nowadays 160 PTE. In
> terms of euros , and with the rate of conversion of  1 Peseta=166.386
> euros, its right price ought to be 0.96 euros. People may expect a
> round-up, for instance to 1 euro (what it is actually accepted to occur by
> shopkeeper, in the sense that they will make more round-ups that
> round-downs). You must realize that this round-up means a price increase of
> 4%. It can be expected that this adjustment would take place in 2002, when
> euro was actually introduced, but there are some signs that this adjustment
> can be currently taken place (it seem to be behind the recent acceleration
> in inflation rates in Netherlands)
>
> The round-up may well be influencing the timing of purchasing. People can
> be advancing their purchases (affecting consumption but also investment
> expenditures) trying to avoid the artificial increase of prices generated
> by the introduction of euro.In this sense an increase in consumption (and
> investment) expenditure can be expected for this year, followed by a fall
> in year 2002.
>
> Jesus Ferreiro
> Departamento Economia Aplicada V
> F.CC. Economicas y Empresariales
> Universidad del Pais Vasco
> Avenida Lehendakari Agirre, 83
> 48015 Bilbao
> Spain
> E-mail: ebpfeapj@xxxxxxxxx
>
> ----------
> > De: Leor Gruendlinger <lgruendl@xxxxxxxxx>
> > A: pkt@xxxxxxxxxxxxxxxx
> > Asunto: The upcoming introduction of the Euro
> > Fecha: jueves 1 de marzo de 2001 16:47
> >
> > Hello,
> >
> > I wonder whether it is possible to find references on possible
> > psychological effects of the introduction of the Euro notes and coins in
> > 2002. Prices will then be displayed in nominally lower numbers (because
> > a Euro is worth more than a DM, an FFR or an ITL) for consumers who have
> > grown accustomed to roughly stabe prices.
> >
> > Does it make any sense to expect a short-term psychological effect on
> > consumption, similar to the buying sometimes observed after stock
> > splits?
> >
> > Leor.
> >
> > --
> > Leor Gruendlinger           Vrije Universiteit Brussel
> > lgruendl@xxxxxxxxx          Krijgskundestraat 33
> > Tel. 02-6442677             B-1160, Brussel

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