More than 7 out of 10 of its members Greek Economists Group claim that the last high inflation it did her more harm than good National economydespite the fact that this improved the public debt-to-GDP ratio and contributed to the increase in public revenues, mainly through indirect taxation.

High inflation under normal conditions is seen as so dangerous that one of the main propaganda tasks central banks is to maintain price stability by keeping inflation at a consistently low level. Beyond the most obvious impact of high inflation, high inflation usually involves painful measures.

However, in the context of the recent period of high inflation, some positive spillover effects were also highlighted, especially for economies such as Greece, as the situation, on the one hand, allowed the ratio of public debt to GDP to be reduced from about 212%. in 2020 to about 177% in 2022, which at the same time will lead to an increase in government revenues, mainly through indirect taxation due to rising prices for products and services. These results, combined with an assessment that the inflationary crisis may be temporary, as it is largely linked to the Russian invasion of Ukraine, has led some analysts to be less pessimistic about the effects of inflation than usual.

25 Greek economists responded to the Group’s March question. Of these, 72% believe that recent inflationary trends have done more harm to the national economy than good, while 16% believe the opposite. 12% are located between the two options. In their comments, posted in full on the website of the Center for Liberal Studies, members of the Hellenic Panel of Economists note, on the one hand, the instability and uncertainty generated by inflation, undermining confidence in the financial authority of the state, as well as the fact that it has effectively deprived the vast majority of Greek men and women who have not received a significant increase since 2010.

In any case, and regardless of individual position on this issue, the parameter of whether the effects of inflation will be more permanent is emphasized, especially in terms of fiscal and broader policy expectations. However, perhaps the greatest danger of high inflation lies in the often lasting changes it causes in people’s expectations and motivations, whether households, businesses or politicians.

* Mr. Giorgos Archondas is a member of the Scientific Council of the Center for Humanitarian Studies and the head of the Hellenic Group of Economists. The Greek Economists Group is an initiative of the Center for Humanitarian Studies that aims to record and report on the voices of leading Greek women and Greek economists on critical economic policy issues. The panel is attended by 75 economists from 59 universities and institutions in 11 countries. A detailed list of participants, their answers to monthly questions and explanatory comments, as well as answers to frequently asked questions about the Panel can be found on the website of the Center for Humanitarian Studies – kefim.org.