A Fiscal-Monetary Policy Scheme Against Greek Indebtedness and Impoverishment

Gerasimos T. Soldatos

MPRA Paper from University Library of Munich, Germany

Abstract: Troika economics has brought Greece to a serious depression at a zero lower bound, with near unlimited supply of labor and near unlimited demand for money. In this paper, it is argued that these circumstances dictate to Greece the implementation individually of a long-term self-financing deficit-spending plan as a means of putting money into circulation in the country. Such a seigniorage-based self-financing deficit-spending, will boost demand and in response, output, tax base and tax revenue given the tax rate, with the increase in revenue being more than enough to be covering the deficit, and the excess revenue being channeled to paying out the accumulated debt. A k-percent monetary growth rule and constant inflation rate should be put forward, domestic credit expansion should be kept below OECD average, and potential output and tax Laffer curve assessments should be keeping track of the changing hysteresis effect. In view of the political instability plaguing modern Greece, the k-percent, balanced-budget, and no-open-market operations (unless under acts of God) rules should be constitutionalised (along with the tax system).

Keywords: Quantity theory of money; Self-financing fiscal policy; Greek austerity (search for similar items in EconPapers)
JEL-codes: E6 H1 I3 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/57080/1/MPRA_paper_57080.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:57080

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().