An Investigation on the Effectiveness of the Devaluation Policy in the Case of the Greek Economy: 1975 I - 1991 I

John M. Paleologos ()
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John M. Paleologos: Department of Economics, University of Piraeus, Postal: 80 Karaoli & Dimitriou St. 185 34 Piraeus GREECE, ,, http://www.unipi.gr/

Economia Internazionale / International Economics, 1993, vol. 46, issue 2-3, 247-258

Abstract: The chief target of this work is to examine whether the devaluation of the Greek currency affected favorably the domestic product under the regime of managed fluctuating exchange rates during the period 1975 I - 1991 I. For this purpose we applied the integration-cointegration approaches using the Augmented Dickey-Fuller (ADF) test. The main finding of this paper is that the gradual devaluation of the drachma against the U.S. dollar did not succeed to influence positively the real economy (i.e. real domestic product). This failure of the gradual depreciation has been due on one hand to the expansive monetary and fiscal policies and elastic incomes policy, and on the other hand to the intense structural problems of the Greek economy (e.g. high dependence of economic activity on imported raw materials and semi-finished goods) as well as to the unfavorable external factors (e.g. oil crises).

Date: 1993
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ecoint:0441

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