In search of a euro effect: Big lessons from a Big Mac Meal?

Was the adoption of the euro accompanied by an increase in prices? Did it promote goods market arbitrage in the form of faster convergence to a common price? By comparing the experience of eurozone countries to non-euro European countries in a 'difference-in-differences' specification, we net out effects on prices unrelated to the euro. We find neither evidence of significant price increases associated with the euro, nor evidence of a significant improvement in market integration.