Press Releases

  • Share:

Bank of Greece Economic Bulletin, Issue 57

01/08/2023 - Press Releases

Today, the Bank of Greece published the latest issue of its Economic Bulletin (No. 57 / July 2023).

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

Issue 57 features the following three articles:

Sophia Lazaretou and George Palaiodimos: “An assessment of the impacts of inflation on Greek public finances: macroeconomic effects and policy implications

In 2022, the global cost of living surged, pushing already rising global inflation to multi-decade highs. In this study, the authors empirically assess the impact of high inflation on Greece’s public finances (in terms of flows), considering the extraordinary economic circumstances arising from the pandemic crisis and the initial phase of the recent energy crisis. To this end, they use a small-scale Bayesian vector autoregressive model for the Greek economy to quantify the effects of an adverse price shock on the primary balance, tax revenue and primary spending (all normalised by nominal GDP), as well as on real output, distinguishing between the effects of a demand- and an external supply-driven shock to inflation. They find that the nature of an inflation shock, i.e. whether it is demand- or supply-driven, is important for correctly identifying the short-to-medium-term effects of inflation shocks on fiscal outcomes.

Iro Kofina and Filippos Petroulakis: “Drivers of inflation in the Greek economy”

After over two decades of low inflation, a series of shocks, including the pandemic recession, supply bottlenecks, highly accommodative policy, and, perhaps most saliently, the war in Ukraine, have led to multi-decade inflation highs across most advanced economies. Understanding the ultimate causes of this inflation surge is vital for the proper design of policy, yet disentangling the various shocks is hard, particularly when they affect prices in the same direction. In this paper, the authors apply the novel shock decomposition framework of Shapiro (2022) to Greek data and estimate the contribution of supply and demand shocks to inflation developments over the recent episode, as well as for the 2001-2019 period. For the recent episode, they find that supply forces were slightly more important for headline inflation, but much more important for underlying inflation.

Marianthi Anastasatou and Sofia Anyfantaki: “COVID-19 pandemic: Overview of the fiscal policy response and macroeconomic developments in the euro area and the United States”

The COVID-19 pandemic has had a profound impact on the European Union and the United States, with varying waves of severity and divergent progress in vaccination campaigns across regions. To address the short-term costs and potential long-term effects of the crisis, policymakers adopted support measures, particularly fiscal policies. This study provides an overview of the fiscal support measures implemented, with a focus on the euro area and the United States. It also examines the impact of the pandemic and of support policies on the economies of both regions, as well as the ongoing economic recovery. By analysing the fiscal responses and the macroeconomic developments, this study aims to contribute to a better understanding of the diverse approaches taken by policymakers in combatting the COVID-19 crisis and mitigating its economic consequences.

Related information:

Issue 57 also includes the abstracts of Working Papers published by the Special Studies Section of the Bank’s Economic Analysis and Research Department between December 2022 and July 2023.

Related link:

The full text of Issue 57 is available on the Bank of Greece website: Bank of Greece Economic Bulletin, Issue 57.

This website uses cookies for the optimization of your user experience. Learn More
I Accept