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The impact of exogenous shocks on the dynamics and persistence of inflation: a macroeconomic model-based approach for Greece

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Author Info

  • Theodore M. Mitrakos

    () (Bank of Greece)

  • Nicholas G. Zonzilos

    () (Bank of Greece)

Abstract

The paper analyses the dynamic response of inflation to various economic shocks and investigates the sources of inflation persistence through a set of counter factual simulations. Analysis shows that inflation seems to be more persistent in Greece than, on average, in Euro Area. Inflation persistence tends to be higher in response to fiscal shocks than others shocks. Only an indirect tax shock could be classified as “non-persistent” for Greece. Inflation persistence is crucially affected by the degree of competition in product market and it is mainly of intrinsic nature while nominal rigidities and frictions in the labor market do not seem important in explaining the relatively higher persistence of Greek inflation.

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File URL: http://www.bankofgreece.gr/BogEkdoseis/econbull200601.pdf
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Bibliographic Info

Article provided by Bank of Greece, Economic Research Department in its journal Economic Bulletin.

Volume (Year): (2006)
Issue (Month): 26 (January)
Pages: 37-57

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Handle: RePEc:bog:econbl:y:2006:i:26:p:37-57

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Web page: http://www.bankofgreece.gr
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Related research

Keywords: Inflation persistence; macroeconomic models; impulse response function;

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Citations

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Cited by:
  1. Papaspyrou Theodoros, 2012. "EMU sustainability and the prospects of peripheral economies," Economic Bulletin, Bank of Greece, Economic Research Department, issue 36, pages 7-29, April.
  2. Hiona Balfoussia & Heather Gibson, 2010. "Inflation and Nominal Uncertainty: the case of Greece," Economic Bulletin, Bank of Greece, Economic Research Department, issue 33, pages 63-78, May.
  3. Zacharias Bragoudakis & Stelios Panagiotou, 2010. "Determinants of the receipts from shipping services: the case of Greece," Economic Bulletin, Bank of Greece, Economic Research Department, issue 34, pages 41-55, September.
  4. Vassilis Th. Rapanoss & Georgia Kaplanoglou, 2010. "Independent Fiscal Councils and Their Possible Role in Greece," Economic Bulletin, Bank of Greece, Economic Research Department, issue 33, pages 7-20, May.
  5. Petros M Migiakis, 2010. "Determinants of the Greek stock-bond correlation," Economic Bulletin, Bank of Greece, Economic Research Department, issue 33, pages 79-90, May.
  6. Faidon Kalfaoglou, 2012. "Bank capital adequacy framework," Economic Bulletin, Bank of Greece, Economic Research Department, issue 36, pages 43-81, April.
  7. Theodoros Mitrakos & Panos Tsaklogou & Ioannis Cholezas, 2010. "Determinants of the wage rates in Greece with an emphasis on the wages of tertiary education graduates," Economic Bulletin, Bank of Greece, Economic Research Department, issue 34, pages 7-40, September.
  8. Theodore Mitrakos & Panos Tsakloglou & Ioannis Cholezas, 2010. "Determining factors of youth unemployment in Greece with emphasis on tertiary education graduates," Economic Bulletin, Bank of Greece, Economic Research Department, issue 33, pages 21-62, May.
  9. Nikos G. Zonzilos & Zacharias G. Bragoudakis & Georgia I. Pavlou, 2009. "An analysis of the reliability of first (flash) quarterly national account data releases for Greece," Economic Bulletin, Bank of Greece, Economic Research Department, issue 32, pages 39-51, May.
  10. Theodoros M. Mitrakos & George T. Simigiannis, 2009. "The determinants of Greek household indebtedness and financial stress," Economic Bulletin, Bank of Greece, Economic Research Department, issue 32, pages 7-26, May.
  11. Christos Papazoglou, 2009. "Is Greece's export performance really low?," Economic Bulletin, Bank of Greece, Economic Research Department, issue 32, pages 27-37, May.
  12. Heather Gibson & hiona Balfousia, 2010. "The impact of nominal and real uncertainty on macroeconomic aggregates in Greece," Economic Bulletin, Bank of Greece, Economic Research Department, issue 34, pages 57-71, September.

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