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21046Re: Euro go-ahead

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  • Martin Votruba
    May 2, 2008
      > whether it is fact or perception but it seemed when other
      > countries switched to the Euro, prices went through the roof.

      Perception. Data have shown consistently that inflation attributable
      to "euro rounding" was 0.2%-0.3% in all of the countries that adopted
      the euro in the past. Sven has described recently how the perceptions
      in Germany differ from that:


      > I can't help but believe the perception at least
      > will be the same in Slovakia.

      I'm sure it will. Opinion polls have shown that people in the euro
      countries ascribed all the subsequent inflation (that would have
      occurred anyway) to the adoption of the euro, and exaggerated the
      total inflation to boot.

      Moreover, earlier opinion polls have shown the Slovaks have enormously
      exaggerated negative perceptions of inflation and of what they see as
      results of government policies, so the euro will most likely open the
      floodgates for adverse overstatement and whining next year.

      In a poll four years ago, for instance, the Slovaks estimated that the
      previous year's inflation was a staggering 18% while the actual
      inflation was 3.3% and average salaries grew by 6.3%.

      There have been other polls that have shown a similar inclination
      towards pessimistic overstatements concerning issues that can be
      perceived as results of government policies. One comparative poll in
      the Czech R., Poland, Slovakia, and Ukraine showed that the most
      negative about such issues and farthest off the mark were the Slovaks.


      votruba "at" pitt "dot" edu
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