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266 points toomuchtodo | 1 comments | | HN request time: 0.225s | source
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jmyeet ◴[] No.44505485[source]
This will likely come with a one-time significant increase in inflation, at least based on other European countries.

When Germany converted to the Euro, the conversion rate was (IIRC) about ~2 DM to the Euro but from what I recall, a lot of everyday things went from costing 7 DM to 7 euro, effectively doubling in price. IIRC France was similar (ie ~6.5 francs to the Euro but 10 Francs went to 3 euro, etc).

I've tried searching for any studies on this to see if the effect was measured and, if so, whether it held with later countries joining the euro.

I'm a little surprised that the euro has been this stable for this long (going on 30 years). Finland debated leaving. IT's debated if there's even a legal mechanism to leave. We still have the problem that the ECB sets eurozone monetary policy with Germany and Greece being vastly different economies.

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nine_k ◴[] No.44506137[source]
Wasn't the lev pinned to euro for years, at the stable rate of 1 lev = 0.5 euro? Why the switching to euro would affect inflation much?
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decimalenough ◴[] No.44506293[source]
It's pinned at 1.95583 to the euro, not 2. If a merchant has a product that sells for 2 lev today, and they sell it for 1 euro tomorrow, they just increased the price by a bit over 2%.
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1. avtolik ◴[] No.44507426[source]
No, in your example this will be a reduction of the price.