Finally, we supplement our econometric analysis by examining the development of the cost factors of production and their impact on the GDP deflator adjusted for imports. The current phase of inflation has been both supply-driven and profit-led.

When the sample is discriminated between Industry and Services, the econometric model performs better for both sectors. This indicates that the Eichner-based pricing model becomes more robust when the structural dimension is taken into account.

When firms engage in a deleveraging process the explanatory power of the cost-plus pricing framework somehow weakens, as firms are not willing to take up more debt.

Our findings indicate that the Greek economy suffers from a weak productive structure, which allows a large pass through from intermediate inputs to output prices. The productive structure has been weakened significantly since the austerity measures that took place in the 2010′s.

- Lots of work have been done on the financial side of the model, while currently there is an effort to enhance the productive sector. Much more is needed regarding the labour market.

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- The research question should determine the structure of the model. NC models are better suited for medium-term projections, while HC can address issues related to green transition and financialization.

My review on empirical SFC models has been published very recently in EJEEP.
Main takeaways:
- Based on number of institutional sectors, physical and financial assets, empirical SFC models can be divided into three types, a) the New Cambridge (NC) in which households, firms and banks are aggregated,