Switch to Devalued Drachma and Cost-Push Inflation: A Simple Input-Output Approach to the Greek Case

Apostolis Katsinos, Theodore Mariolis

Department of Public Administration, Panteion University, Athens, Greece.

DOI: 10.4236/me.2012.32023                

Abstract

This paper uses simple dynamic input-output price models to estimate the effects of a switch to devalued drachma on the cost-inflation rate in the Greek economy. The findings suggest that the inflationary “pressures” are not too high and, therefore, there is room for trade-balance improvement.

Keywords

Cost-Push Inflation; Drachma Devaluation; Dynamic Input-Output Price Models; Greek Economy; International Competitiveness

Conflicts of Interest

The authors declare no conflicts of interest.

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