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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: http://www.bankofgreece.gr/BogEkdoseis/econbull200501.pdf
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    References listed on IDEAS

    as
    1. Sideris, Dimitrios, 2006. "Testing for long-run PPP in a system context: Evidence for the US, Germany and Japan," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 16(2), pages 143-154, April.
    2. van Praag, Bernard M. S., 1991. "Ordinal and cardinal utility : An integration of the two dimensions of the welfare concept," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 69-89, October.
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    Citations

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    Cited by:

    1. Costas N. Kanellopoulos, 2012. "Employment and worker flows during the financial crisis," Economic Bulletin, Bank of Greece, issue 36, pages 31-41, April.
    2. Costas N. Kanellopoulos, 2014. "The private sector Greek labour market during the crisis," Economic Bulletin, Bank of Greece, issue 39, pages 21-36, July.
    3. Petros M. Migiakis, 2012. "Reviewing the proposals for common bond issuances by the euro-area sovereign under a long-term perspective," Economic Bulletin, Bank of Greece, issue 37, pages 43-54, December.
    4. Costas N. Kanellopoulos, 2012. "The Size and structure of uninsured employment," Economic Bulletin, Bank of Greece, issue 37, pages 23-41, December.
    5. 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, issue 32, pages 39-51, May.
    6. Zacharias Bragoudakis & Dimitrios Sideris, 2012. "Do retail gasoline prices adjust symmetrically to crude oil price changes? the case of the Greek oil market," Economic Bulletin, Bank of Greece, issue 37, pages 7-21, December.
    7. Theodoros M. Mitrakos & George T. Simigiannis, 2009. "The determinants of Greek household indebtedness and financial stress," Economic Bulletin, Bank of Greece, issue 32, pages 7-26, May.
    8. Sophia Lazaretou, 2014. "The smart economy: cultural and creative industries in Greece: can they be a way out of the crisis?," Economic Bulletin, Bank of Greece, issue 39, pages 73-103, July.
    9. Theodore Pelagidis & Taun Toay, 2007. "Expensive Living: The Greek Experience under the Euro," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 42(3), pages 167-176, May.
    10. Dimitra Dimitropoulou & Anastasia Koutsomanoli-Filippaki & Evangelos Charalambakis & Georgios Aggelis, 2014. "The financing of Greek enterprises before and during the crisis," Economic Bulletin, Bank of Greece, issue 39, pages 7-20, July.
    11. Christos Papazoglou, 2009. "Is Greece's export performance really low?," Economic Bulletin, Bank of Greece, issue 32, pages 27-37, May.
    12. Aikaterini Chaireti, 2014. "The housing situation of residents of Greece in the time of crisis 2008-2012," Economic Bulletin, Bank of Greece, issue 39, pages 105-141, July.
    13. Faidon Kalfaoglou, 2014. "European banking union: “Europeanising” banks’ financial safety net," Economic Bulletin, Bank of Greece, issue 39, pages 37-72, July.

    More about this item

    Keywords

    inflation; income redistribution; inequality;

    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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