Anatomy of the Greek Depression with Firm-Level Data: The Importance of Demand Shocks

Stelios Giannoulakis and Plutarchos Sakellaris

American Economic Journal: Macroeconomics, 2026, vol. 18, issue 1, 260-96

Abstract: During the Greek Depression, which saw a 22 percent decline in output, young firms and small firms experienced significantly steeper declines in sales growth compared to their mature and larger counterparts. This disparity was largely driven by adverse demand shocks and was further intensified by financing constraints (FCs), with a significant interaction between these two factors amplifying the impact. Firm-level heterogeneity played a critical role in shaping macroeconomic outcomes, with the disproportionate impact on young firms and small firms accounting for approximately one-quarter of the total output decline during the crisis.

JEL-codes: D22 E23 E32 E44 G32 L25 (search for similar items in EconPapers)
Date: 2026
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DOI: 10.1257/mac.20220125

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