This paper considers the determinants of consumer price inflation in Greece. It uses alternative models of a small open economy that allow for the influence of both cost and monetary factors. It turns out that the only period for which inflation in Greece was imported was 1970 to 1974. The small increase in average inflation between 1970-74 and 1975-79 was due to an acceleration of nominal wage increases relative to productivity, while the further increase between 1975-79 and 1980-84 was due to the belated depreciations of the drachma. The only period in which excess monetary growth had a significant independent influence on inflation was 1970-74, and even then, it was not the major factor.
Greek Economic Review