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The Contribution of Sectoral Productivity Differentials to Inflation in Greee

  • Heather D. Gibson

    ()

    (Bank of Greece)

  • Jim Malley

    (University of Glasgow and CESifo)

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://www.bankofgreece.gr/BogEkdoseis/Paper200763.pdf
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Paper provided by Bank of Greece in its series Working Papers with number 63.

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Length: 39 pages
Date of creation: Nov 2007
Date of revision:
Handle: RePEc:bog:wpaper:63
Contact details of provider: Web page: http://www.bankofgreece.gr

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  20. Crespo-Cuaresma, Jesús & Fidrmuc, Jarko & McDonald, Ronald, 2003. "The monetary approach to exchange rates in the CEECs," BOFIT Discussion Papers 14/2003, Bank of Finland, Institute for Economies in Transition.
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  23. Canzoneri, Matthew, et al, 2002. "Productivity Trends in Europe: Implications for Real Exchange Rates, Real Interest Rates, and Inflation," Review of International Economics, Wiley Blackwell, vol. 10(3), pages 497-516, August.
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  26. 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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