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The Contribution of Sectoral Productivity Differentials to Inflation in Greece

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  • Heather Gibson
  • Jim Malley

Abstract

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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  • Heather Gibson & Jim Malley, 2008. "The Contribution of Sectoral Productivity Differentials to Inflation in Greece," Open Economies Review, Springer, vol. 19(5), pages 629-650, November.
    • Handle: RePEc:kap:openec:v:19:y:2008:i:5:p:629-650
    DOI: 10.1007/s11079-007-9071-3
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    Cited by:

    1. Roumen Avramov & Dragana Gnjatovic, 2008. "Stabilization Policies in Bulgaria and Yugoslavia During Communism's Terminal Years : 1980s Economic Visions in Retrospect," Working Papers 81, Bank of Greece.
    2. Athanasios Tagkalakis, 2015. "Fiscal policy, net exports, and the sectoral composition of output in Greece," International Economics and Economic Policy, Springer, vol. 12(4), pages 521-539, October.
    3. Ansgar Belke & Ulrich Haskamp & Gunther Schnabl, 2018. "Beyond Balassa and Samuelson: real convergence, capital flows, and competitiveness in Greece," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 45(2), pages 409-424, May.
    4. Oscar Iván Ávila Montealegre & Mauricio Rodríguez Acosta & Hernando Zuleta González, 2014. "The Balassa-Samuelson Hypothesis and Elderly Migration," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 32(74), pages 1-8, June.
    5. Yuksel Gormez, 2008. "Banking in Turkey: History and Evolution," Working Papers 83, Bank of Greece.
    6. Sophia Lazaretou, 2008. "Banking and Central Banking in Pre-WWII Grecce: Money and Currency Developments," Working Papers 86, Bank of Greece.
    7. Stephan Barisitz, 2008. "Banking Transformation (1989 - 2006) in Central and Eastern Europe - With Special Reference to Balkans," Working Papers 78, Bank of Greece.
    8. Balfoussia Hiona, 2008. "Stock market integration-the athens exchange in the european financial market," Economic Bulletin, Bank of Greece, issue 30, pages 29-55, May.
    9. Desli, Evangelia & Pelagidis, Theodore, 2012. "Greece's Sudden Faltering Economy: From Boom to Bust With special reference to the debt problem," MPRA Paper 106955, University Library of Munich, Germany.
    10. Heather D Gibson & Georgia Pavlou, 2017. "Exporting and performance:evidence from Greek firms," Economic Bulletin, Bank of Greece, issue 45, pages 7-30, July.
    11. Gibson, Heather D. & Hall, Stephen G. & Tavlas, George S., 2012. "The Greek financial crisis: Growing imbalances and sovereign spreads," Journal of International Money and Finance, Elsevier, vol. 31(3), pages 498-516.
    12. Asimakopoulos G. Ioannis & Brissimis N. Sophocles & Delis D. Manthos, 2008. "The Efficiency of the Greek Banking System and its Determinants," Economic Bulletin, Bank of Greece, issue 30, pages 7-27, May.
    13. Peter Bernholz, 2008. "Government Bankruptcy of Balkan Nations and their Consequences for Money and Inflation before 1914: A Comparative Analysis," Working Papers 74, Bank of Greece.
    14. Zarko Lazarevic, 2008. "Banking Performance in South-Eastern Europe During the Interwar Period," Working Papers 79, Bank of Greece.
    15. Apostolides, Alexander, 2008. "“How Similar to South-Eastern Europe were the Islands of Cyprus and Malta in terms of Agricultural Output and Credit? Evidence during the Interwar Period”," MPRA Paper 9968, University Library of Munich, Germany.
    16. Milan Sojic & Ljiljana Djurdjevic, 2008. "Monetary Policy Objectives and Istruments used by the Privileged National Bank of the Kingdom of Serbia (1884 - 1914)," Working Papers 87, Bank of Greece.

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    More about this item

    Keywords

    Balassa–Samuelson effect; Greece; Inflation; Productivity; E31; F36; F41;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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