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Title: Political Parties, Elections and Inflation in Greece

Author(s): George Alogoskoufis and Apostolis Philippopoulos

Publication Date: June 1991

Keyword(s): Elections, Greece, Political Parties and Unemployment

Programme Area(s): International Macroeconomics

Abstract: We extend the `rational partisan model' of inflation and unemployment by introducing inflation and unemployment dynamics. We investigate the case of Greece, which has had a polarized political system and a problem of persistently high inflation in the last two decades. High inflation can be attributed to the failure of political parties to precommit to price stability. The greater aversion of `socialists' to unemployment results in an inflation rate which is higher by five percentage points than under the more anti-inflationary `conservatives'. Unemployment seems to be independent of the identity of the party in power, and post-election years do not seem to be characterized by systematic mistakes on the part of wage setters as predicted by recent partisan theories.

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Bibliographic Reference

Alogoskoufis, G and Philippopoulos, A. 1991. 'Political Parties, Elections and Inflation in Greece'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=547