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A synthetic investigation at the root causes of inflation in Greece

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  • Paitaridis, Dimitris
  • Pierros, Christos

Abstract

In this paper, we examine the elasticities of the cost factors that drive prices in Greece. Based on Eichner, we apply an extended cost-plus pricing approach in a multi-sector panel model. Specifically, we integrate technological, fiscal and monetary factors in the standard Kaleckian price formula. Our results are able to explain the drivers of the current phase of inflation but also to highlight the impact of the re-structuring of the Greek economy that took place during the past decade on price formation. For instance, the pass through from intermediate input to output prices has increased significantly, since 2009. Additionally, the econometric model performs better when the sample is divided in Industry and Services. However, when firms engage in a deleveraging process the explanatory power of the cost-plus pricing framework is constrained.

Suggested Citation

  • Paitaridis, Dimitris & Pierros, Christos, 2025. "A synthetic investigation at the root causes of inflation in Greece," Structural Change and Economic Dynamics, Elsevier, vol. 75(C), pages 937-948.
    • Handle: RePEc:eee:streco:v:75:y:2025:i:c:p:937-948
    DOI: 10.1016/j.strueco.2025.11.002
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    Keywords

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    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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