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The redistributional impact of inflation in Greece

Author

Listed:
  • Theodore Mitrakos

    (Bank of Greece)

  • Stauros Zografakis

    (University of Patras)

Abstract

Inflation is often assumed to affect all people in the same way. However, differences in spending patterns across households and differences in price changes across goods and services lead to a different inflation rate for each household. In this paper, we estimate inflation rates for various population groups in Greece during the period 1999-2004 as well as the causes of differences between them. Our results suggest that these differences are considerable and the most of them can be traced to changes in the relative prices of food & non-alcoholic beverages, housing, and alcoholic beverages & tobacco. We find that socially-sensitive population groups such as pensioners, the unemployed, the economically weak and more generally individuals facing a relatively high risk of poverty suffer disproportionately from inflation. Moreover, the distributional impact of price changes seems to have a negative effect on various inequality and poverty indices.

Suggested Citation

  • Theodore Mitrakos & Stauros Zografakis, 2005. "The redistributional impact of inflation in Greece," Economic Bulletin, Bank of Greece, issue 24, pages 45-82, January.
    • Handle: RePEc:bog:econbl:y:2005:i:24:p:45-82
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    File URL: https://www.bankofgreece.gr/BogEkdoseis/econbull200501.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    inflation; income redistribution; inequality;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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