The political economy of the Greek debt crisis: a tale of two bailouts

Silvia Ardagna and Francesco Caselli

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We review the events that led to the May 2010 and July 2011 bailout agreements. We interpret the bailouts as outcomes of political-economy equilibria. We argue that these equilibria were likely not on the Pareto frontier, and sketch political-economy arguments for why collective policymaking in the Euro area may lead to suboptimal outcomes.

JEL-codes: E58 E62 F34 H61 H63 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (37)

Published in American Economic Journal: Macroeconomics, 2014, 6(4), pp. 291-323. ISSN: 1945-7707

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