Wage versus currency devaluation, price pass-through and income distribution: a comparative input–output analysis of the Greek and Italian economies

by T. Mariolis, N. Rodousakis and A. Katsinos

Journal of Economic Structures, The Official Journal of the Pan-Pacific Association of Input-Output Studies (PAPAIOS),  2019, 8:9.


Using input–output data from Symmetric Input–Output Tables for the year 2010 and relevant price models, this paper provides empirical estimations of medium- and long-run effects of wage and currency devaluations on international price competitiveness and income distribution for two ‘PIIGS economies’, i.e. Greece and Italy. The findings reveal certain differentiated socio-technical production conditions in the economies under consideration casting doubt on the effectiveness of demand-switching policy measures implemented in the post-2010 Eurozone economy. At the same time, however, wage devaluation is found to be a comparatively slow and inefficient process to improve international price competitiveness in the medium-run.

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