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Athanassios Petralias & Pródromos Prodromídis: Price discovery under crisis: Uncovering the determinant factors of prices using efficient Bayesian model selection methods

We seek to uncover the determinants of consumer prices in Greece by considering a large set of potential factors and accounting for delayed effects. To accomplish this we rely on recently presented Bayesian model selection methods which are efficiently adapted in the present context. Consumer prices drop significantly during the periods of discount sales, especially in the last two years; VAT changes are mostly absorbed (above 50%) by the producers; while a drop in retail sales affects prices with a significant lag (of 6 months). Evidence οn the ways several other factors affect prices is also obtained.

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