Psychological Consequences on prices expectations of the currency as a unit of account

Money, as a unit of account, has been interpreted unanimously in economics as a neutral value yardstick, especially in case of fixed exchange rates. The experimental results (120 participants) show that during the transition from the Lira to the Euro (1999-2002) – despite all the information duly provided – there was a specific cognitive and affective inertia which has brought about a diffuse perception of a misleading double monetary standard (Lira/Euro) at work. As a result, we have thus tried to see whether prices expectations are affected by the unit of account chosen in the mental forecasting process. In point of fact, the experiment confirms this hypothesis and is actually consistent with other independent results. True enough, there are indeed a few differences in forecasting by dissimilar units of account but these are seminal as they suggest also the relevance of attitudes underpinning the phenomena under scrutiny.