Abstract

http://ssrn.com/abstract=2039002
 
 

References (45)



 


 



Greece's Sudden Faltering Economy: From Boom to Bust with Special Reference to the Debt Problem


Theodore Pelagidis


University of Piraeus

Evangelia Desli


Aristotle University of Thessaloniki - Department of Economics

April 12, 2012

Papers in International Political Economy, 2012, Forthcoming

Abstract:     
In this paper, we deal with theoretical propositions and empirical evidence that are needed to explain the paradox of rapid GDP growth in the face of the dismal competitiveness of the Greek economy during 1995-2008. We show how Greece’s economy structural weaknesses have hit the domestic economy and we investigate their impact on the current turmoil of the economy. We show that the previous favourable global economic environment acted as a locomotive to domestic growth, and now that it is gone, structural problems of poor governance, low competitiveness and a ballooning public deficit and debt, have come to the surface. Also, in the context of debt sustainability we look at the recent actions to reduce debt that are taken by the Growth and Stability Program. We construct five scenarios regarding the level of public debt at the end of the 2011-2015 period that is commonly accepted that Greece will return to global financial markets to finance its debt. We find that only under a very optimistic scenario of robust growth of the economy based on structural and institutional reforms that boost productivity, significantly improve competitiveness, and boost the financial sector as described in the Growth and Stability Program along with a successful privatization of 50 billion euros the public debt to gdp ratio can reach the 60% threshold that the financial markets find comfortable. We offer a specific explanation of the current unfortunate state of the economy and we briefly suggest avenues of necessary progressive reforms to overcome it.

Number of Pages in PDF File: 42

Keywords: Macroeconomy and Institutions, Competitiveness, The Greek Economy

JEL Classification: D020, E020, E300, E660

Accepted Paper Series


Download This Paper

Date posted: April 12, 2012  

Suggested Citation

Pelagidis, Theodore and Desli, Evangelia, Greece's Sudden Faltering Economy: From Boom to Bust with Special Reference to the Debt Problem (April 12, 2012). Papers in International Political Economy, 2012, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2039002

Contact Information

Theodore Pelagidis (Contact Author)
University of Piraeus ( email )
21 Lambraki street
80 KARAOLI & DIMITRIOU STREET
Piraeus, Attiki 18533
Greece
+3021 04142526 (Phone)
+3021 4142571 (Fax)
HOME PAGE: http://www.maritime-studies.gr/index.php?option=com_comprofiler&task=userProfile&user=95&Itemid=183
Evangelia Desli
Aristotle University of Thessaloniki - Department of Economics ( email )
Thessaloniki, 54006
Greece
Feedback to SSRN


Paper statistics
Abstract Views: 591
Downloads: 108
Download Rank: 147,355
References:  45

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.297 seconds