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Wage versus currency devaluation, price pass-through and income distribution: a comparative input–output analysis of the Greek and Italian economies

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  • Theodore Mariolis

    (Panteion University)

  • Nikolaos Rodousakis

    (Panteion University)

  • Apostolis Katsinos

    (Neapolis University)

Abstract

Using input–output data from Symmetric Input–Output Tables for the year 2010 and relevant price models, this paper provides empirical estimations of medium- and long-run effects of wage and currency devaluations on international price competitiveness and income distribution for two ‘PIIGS economies’, i.e. Greece and Italy. The findings reveal certain differentiated socio-technical production conditions in the economies under consideration casting doubt on the effectiveness of demand-switching policy measures implemented in the post-2010 Eurozone economy. At the same time, however, wage devaluation is found to be a comparatively slow and inefficient process to improve international price competitiveness in the medium-run.

Suggested Citation

  • Theodore Mariolis & Nikolaos Rodousakis & Apostolis Katsinos, 2019. "Wage versus currency devaluation, price pass-through and income distribution: a comparative input–output analysis of the Greek and Italian economies," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-23, December.
    • Handle: RePEc:spr:jecstr:v:8:y:2019:i:1:d:10.1186_s40008-019-0140-8
    DOI: 10.1186/s40008-019-0140-8
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    Cited by:

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    2. Zacharias Bragoudakis & Evangelia Kasimati & Christos Pierros & Nikolaos Rodousakis & George Soklis, 2022. "Measuring Productivities for the 38 OECD Member Countries: An Input-Output Modelling Approach," Mathematics, MDPI, vol. 10(13), pages 1-21, July.
    3. Javier Bilbao‐Ubillos & Ana‐Isabel Fernández‐Sainz, 2022. "The results of internal devaluation policy as a crisis exit strategy: The case of Spain," Global Policy, London School of Economics and Political Science, vol. 13(5), pages 767-781, November.

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    More about this item

    Keywords

    Income distribution; Input–output price models; International price competitiveness; PIIGS economies; Price pass-through; Wage and currency devaluations;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy

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