We study good-by-good deviations from the Law-of-One-Price for over 1,800 retail goods and services between all European Union (EU) countries for the years 1975, 1980, 1985 and 1990. We find that for each of these years, after we control for differences in income and value-added tax rates, there...

A number of recent papers point to the importance of distinguishing between the price reaction to micro and macro shocks in order to reconcile the volatility of individual prices with the observed persistence of aggregate inflation. We emphasize instead the importance of distinguishing between...

We use a panel of thousands of good-level prices before and after the euro in order to compare the determinants and understand the evolution of goods price dispersion across Europe during these two periods. We find that tradeability plays a substantially smaller role in lowering cross-country...