“Twin deficits” in Greece: in search of causality

Michalis Nikiforos () and Christian Schoder
Authors registered in the RePEc Author Service: Laura Carvalho

No 2015_09, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: The paper discusses the trajectories of the Greek public deficit and sovereign debt between 1980 and 2010 and its connection to the political and economic environment of the same period. We pay special attention to the causality between the public and the external deficit in the period after 1995, the post-Maastricht treaty period. We argue that, due to the European monetary unification process and the adoption of the common currency, causality ran from the external deficit to the public deficit. This hypothesis is tested econometrically using both Granger Causality and Cointegration analyses. We find empirical support for this hypothesis

Keywords: Greece; crisis; public debt; twin deficits; imbalances (search for similar items in EconPapers)
JEL-codes: E62 F21 F34 F41 (search for similar items in EconPapers)
Date: 2015-05-20
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-opm
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Citations: View citations in EconPapers (34)

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Related works:
Journal Article: “Twin deficits” in Greece: in search of causality (2015)
Working Paper: "Twin deficits" in Greece in search of causality (2014)
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