Speculative Attacks on the Drachma and the Changeover to the Euro

Tassos Anastasatos and Constantina Manou ()
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Tassos Anastasatos: Eurobank EFG
Constantina Manou: Bank of Greece

Economic Bulletin, 2008, issue 31, pages 49-77

Abstract: This article examines speculative attacks against the Greek drachma from 1960 until the adoption of the euro in 2001. The analysis is preceded by a historical review. Subsequently, using monthly data on a plethora of economic, financial and political variables, a range of Limited Dependent Variable Models (both binomial and multinomial) is estimated. This methodology allows devaluations to be differentiated from speculative pressure which was successfully repelled. Findings suggest that, until the early 1990s, speculative attacks were largely related to domestic macroeconomic imbalances. However, the effort to fulfill the Maastricht criteria disciplined policies. Thereafter, disturbances were more related to contagion from international crises due to increasing international interdependence.

Keywords: drachma; adoption of euro; speculative attacks (search for similar items in EconPapers)
JEL-codes: F32 F36 (search for similar items in EconPapers)
Date: 2008
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Persistent link: http://EconPapers.repec.org/RePEc:bog:econbl:y:2008:i:31:p:49-77

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