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Bank of Greece Economic Bulletin, Issue 56

08/02/2023 - Press Releases

Today, the Bank of Greece published the latest issue of its Economic Bulletin (No. 56 / December 2022).

The articles published in the Economic Bulletin reflect the views of the authors and not necessarily those of the Bank of Greece.

Issue 56 features the following three articles:

Nikolaos Vettas, Alexandros Louka, Konstantinos Peppas, Yakinthi Pountouraki and Michael Vasileiadis: “Trends in Total Factor Productivity in Greece and its Determinants During the Period 2005-2019”

In this study, the authors examine the growth rate of Total Factor Productivity (TFP) for fifteen 2-digit sectors of the Greek economy during the period 2005-2019. This measure is the sum of the rate of technical change, the rate of change in technical efficiency and the rate of change in returns to scale, that is, the authors have not adopted a full efficiency assumption in production. The estimations show that the vast majority of the sectors suffered negative TFP growth, primarily during the period of the economic crisis and in the first 3-4 years of implementation of the economic adjustment programmes, whereas in the subsequent years this negative rate of change slowed down. Exporting firms exhibit less negative TFP growth, likely because the production of these firms was more resistant to the pressures exerted by the crisis and, as a result, the components of TFP were less affected. Medium-sized and large firms have also recorded less negative TFP growth, which probably reflects the fact that they were better placed to respond to the fluctuations of the Greek economy, for example through higher profitability or export activity. Technology-intensive firms had a negative TFP growth rate, which was increasing in the 2006-2010 period, probably due to the unfavourable macroeconomic conditions that hampered their production. The firms that have not survived the entire 2006-2019 period had a strongly negative rate of TFP change and this most likely explains their failure to survive. In contrast, firms that have survived had, on average, a negative TFP growth rate, which was 11.1 percentage points lower than that of non-surviving firms. Finally, the results reflect a decline or small fluctuations in productivity indicators for most 1-digit sectors since 2011 or 2012, in relation to their levels before the economic crisis.

Christos Antonopoulos, Sofia Anyfantaki, Hiona Balfoussia, Theodora Kosma, Evangelia Papapetrou, Filippos Petroulakis, Pavlos Petroulas and Pinelopi Zioutou: “The Greek Labour Market Before and After the Pandemic: Slack, Tightness and Skills Mismatch”

The Greek labour market recorded a significant improvement during the first half of 2022. This is encouraging and reflects, inter alia, output growth, the government support measures during the pandemic and the implementation of important structural reforms during the previous decade. However, in the current inflationary environment, the question that arises is whether the labour market is slack or tight and whether wage pressures may be emerging. This article draws on diverse sources of information on the labour market, in an attempt to shed some light on this question and examine how the Greek labour market evolved before and after the pandemic. In sum, unemployment remains high in Greece, well above the euro area average, and labour market slack is still evident by most measures. However, pockets of tightening are beginning to emerge at the sectoral level. Moreover, slack is declining at a fast pace, much faster than in the euro area, as suggested by the drop in unemployment over the past three years. The high share of long-term unemployment and the rather elevated estimates of efficient unemployment presented in this article also point in the same direction. Given recent strong employment growth and the prospect of a significant need for additional labour over the coming years due to the implementation of the NextGenerationEU plan, labour market tightness could increase further. This concern is further compounded by extensive survey evidence of skills mismatches in the Greek labour market, which are known to adversely affect allocative efficiency and, thus, productivity. Looking ahead, it is particularly important to pursue labour market policies aimed at increasing participation rates and upskilling or reskilling the labour force, including in particular the long-term unemployed.

Ioanna C. Bardakas: “Energy Consumption by Energy Type and Exports of Goods in Greece: A Comparative Analysis in Relation to the Euro Area”

The rapid expansion of non-oil goods exports in Greece during the last decade contributed to raising net exports despite the severe economic crisis the country was undergoing. Nevertheless, the EU’s overall energy consumption exhibited a downward trend that was even stronger in Greece. This study examines the dynamic relationship between exports of non-energy goods and final consumption of energy in Greece and the euro area over the last two decades, considering five separate energy types. Single equation and panel estimations are employed, making it possible to compare the results of the two approaches. It is shown that exports of goods in Greece are dependent on the final consumption of oil, electricity and renewable energy, while the final consumption of natural gas, oil and electricity has an effect on goods exports in the euro area. The largest effect on exports of goods in Greece comes from electricity consumption, part of which has been produced by renewable energy in recent years. Greece’s goods exports are found to have a higher dependence on renewable energy consumption than the euro area’s, which is related to the recent higher growth of renewable energy consumption. Statistically significant causal relationships are found between goods exports and the traditional energy types (i.e. oil and natural gas) both in Greece and the euro area. The prospects for accelerating the energy transition are not as favourable, following the emergence of the energy crisis. This negative outlook may have consequences on Greece’s improved openness and on the rising trajectory of goods exports.

Related information:

Issue 56 also includes the abstracts of Working Papers published by the Special Studies Section of the Bank’s Economic Analysis and Research Department between August and December 2022.

Related link:

The full text of Issue 56 is available on the Bank of Greece website: Bank of Greece Economic Bulletin, Issue 56.

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