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The domestic Balassa--Samuelson effect of inflation for the Greek economy

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  • Nicholas Apergis

Abstract

The goal of this study is to assess whether and to what extent inflation differentials between the tradable and nontradable sectors in the Greek economy are due to the domestic version of the Balassa--Samuelson (BS) effect and, therefore, the ‘expensiveness’ of the country and its huge deficit of international competitiveness. Using data over the period 1989 to 2009 from the Greek economy, the empirical results indicate that the domestic BS effect is present for the case of Greece and seems to explain about 33% of the overall inflation rate.

Suggested Citation

  • Nicholas Apergis, 2013. "The domestic Balassa--Samuelson effect of inflation for the Greek economy," Applied Economics, Taylor & Francis Journals, vol. 45(23), pages 3288-3294, August.
    • Handle: RePEc:taf:applec:v:45:y:2013:i:23:p:3288-3294
    DOI: 10.1080/00036846.2012.707774
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    References listed on IDEAS

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    1. Balàzs Ègert, 2003. "Nominal and real convergence in Estonia: the Balassa-Samuelson (Dis)connection," Bank of Estonia Working Papers 2003-4, Bank of Estonia, revised 10 Oct 2003.
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    5. Theodore Pelagidis & Taun Toay, 2007. "Expensive Living: The Greek Experience under the Euro," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 42(3), pages 167-176, May.
    6. Laszlo Halpern & Charles Wyplosz, 2001. "Economic Transformation and Real Exchange Rates in the 2000s: The Balassa-Samuelson Connection," ECE Discussion Papers Series 2001_1, UNECE.
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    Cited by:

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    2. Nicholas Apergis, 2011. "Characteristics of inflation in Greece: Mean Spillover Effects among CPI Components," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 43, Hellenic Observatory, LSE.
    3. Jiang, Yong & Al-Nassar, Nassar S. & Ren, Yi-Shuai & Ma, Chao-Qun & Yang, Xiao-Guang, 2024. "Tail connectedness between category-specific policy uncertainty, sovereign debt risk, and stock volatility during a high inflation period," Research in International Business and Finance, Elsevier, vol. 70(PB).
    4. Choi, Yoonho & Jin, Hailong & Choi, E. Kwan, 2018. "Why are nontraded goods cheaper in poor countries?," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 210-219.
    5. Lopcu, Kenan & Dülger, Fikret & Burgaç, Almıla, 2013. "Relative productivity increases and the appreciation of the Turkish lira," Economic Modelling, Elsevier, vol. 35(C), pages 614-621.

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