Is Greece turning the corner? A theory-based assessment of recent Greek macro-policy

Michael Arghyrou

No E2014/16, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: We use a macro-theory framework of analysis to assess Greek economic policy, with emphasis on the current period of the Greek debt crisis. We argue that this is mainly the result of misguided past internal policies deviating substantially from the policy lessons of modern macroeconomics. The current policy, however, is consistent with mainstream macro and provides a credible platform for achieving sustainable growth. We argue that Greece has entered the process of economic recovery, but this is still fragile and exposed to risks. Overall, we support the continued participation of Greece to the euro: Although a country s currency is not per se a determinant of long-term economic prosperity, supply-side reforms and institutional performance are,and both these objectives are better served for Greece within the EMU rather than outside.

Keywords: Macroeconomics; Greece; euro (search for similar items in EconPapers)
JEL-codes: B22 E00 F4 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2014-09
New Economics Papers: this item is included in nep-eec and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Is Greece Turning the Corner? A Theory-Based Assessment of Recent Greek Macro-Policy (2014)
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