Currency Devaluation, External Finance and Economic Growth: A Note on the Greek Case

Theodore Mariolis ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper combines dynamic input-output price models with Thirlwall’s extended model of balance of payments constrained growth to estimate the effect of a switch to drachma on domestic income. The findings suggest that a return to national currency would not necessarily deepen the recession, although a rather large nominal devaluation, i.e. in excess of 57%-60%, is necessary for the recovery.

Keywords: Drachma Devaluation; Greek Economy; Dynamic Input-Output Price Models; Thirlwall’s Model (search for similar items in EconPapers)
JEL-codes: C67 D57 E11 E12 F41 (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-fdg
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:45257

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