Hobijn, Bart; Ravenna, Federico; Tambalotti, Andrea - In: The Quarterly Journal of Economics 121 (2006) 3, pp. 1103-1131
Restaurant prices in the euro area increased dramatically after the introduction of the euro. We show that this increase can be explained by a common menu cost model, extended to include a state-dependent decision of firms on when to adopt the new currency. Two mechanisms drive this result....