The Macroeconomics of the Greek Depression

Gabriel Chodorow-Reich, Loukas Karabarbounis and Rohan Kekre

No 25900, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Greece experienced a boom until 2007, followed by a collapse of unprecedented magnitude and persistence. We assess the sources of the boom and the bust, using a rich estimated dynamic general equilibrium model. External demand and government consumption fueled the boom in production, whereas transfers fueled the boom in consumption. Different from the standard narrative, wages and prices declined substantially during the bust. Tax policy accounts for the largest fraction of the bust in production, whereas uninsurable risk accounts for the bust in consumption and wages. We assess how the composition of fiscal adjustment and bailouts affected the crisis.

JEL-codes: E20 E32 E44 E62 F41 (search for similar items in EconPapers)
Date: 2019-05
New Economics Papers: this item is included in nep-dge, nep-mac and nep-opm
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Published as Gabriel Chodorow-Reich & Loukas Karabarbounis & Rohan Kekre, 2023. "The Macroeconomics of the Greek Depression," American Economic Review, vol 113(9), pages 2411-2457.

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Related works:
Journal Article: The Macroeconomics of the Greek Depression (2023)
Working Paper: The Macroeconomics of the Greek Depression (2019)
Working Paper: The Macroeconomics of the Greek Depression (2019)
Working Paper: The Macroeconomics of the Greek Depression (2019)
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