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The Contribution of Sectoral Productivity Differentials to Inflation in Greece

  • Heather Gibson

    ()

  • Jim Malley

    ()

This paper estimates the magnitude of the Balassa-Samuelson effect for Greece. We calculate the effect directly, using sectoral national accounts data, which permits estimation of total factor productivity (TFP) growth in the tradeables and nontradeables sectors. Our results suggest that it is difficult to produce one estimate of the BS effect. Any particular estimate is contingent on the definition of the tradeables sector and the assumptions made about labour shares. Moreover, there is also evidence that the effect has been declining through time as Greek standards of living have caught up on those in the rest of the world and as the non-tradeables sector within Greece catches up with the tradeables.

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File URL: http://hdl.handle.net/10.1007/s11079-007-9071-3
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Article provided by Springer in its journal Open Economies Review.

Volume (Year): 19 (2008)
Issue (Month): 5 (November)
Pages: 629-650

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Handle: RePEc:kap:openec:v:19:y:2008:i:5:p:629-650
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  16. Vladislav Flek & Lenka Markova & Jiri Podpiera, 2002. "Sectoral Productivity and Real Exchange Rate Appreciation: Much Ado about Nothing?," Working Papers 2002/04, Czech National Bank, Research Department.
  17. Zacharias Bragoudakis & Demetrios Moschos, 2000. "Relative Prices and Sectoral Labor Productivity Differentials:A long-run Analysis for Greece," Ekonomia, Cyprus Economic Society and University of Cyprus, vol. 4(2), pages 142-155, Winter.
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  24. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584.
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