The EMU Effects on Greek Unemployment: A Preliminary Evaluation of the Inflation-Unemployment Trade-Off (2001 – 2003)

Abstract: With the application of Ordinary Least Squares based on quarterly data of growth rates for inflation and unemployment for the period 2001 – 2003, the study concludes that a trade-off between inflation and unemployment does not exist in the Greek economy. Although the findings indicate that the EMU has no costs on the evolution of unemployment levels in Greece, the factors that generate the economic indicators on which the regression analysis is based point to the opposite direction. The utilization of the structural funds to date, the organization of the Olympic Games and the expansion of household debt are substitutes for the restrained government expenditure and have “temporary positive effects” on the level of aggregate demand. As long as Greece does not meet the expectations on competitiveness that were set as a standard for introducing the Euro, it will experience high levels of unemployment that it will probably not be able to cope with.

Keywords: EMU; Greece; inflation; unemployment (search for similar items in EconPapers)
JEL-codes: E24 E31 R11 R51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-mac
Date: 2005-11-18
Note: Type of Document - pdf; pages: 16. 16 pages, 2 tables
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