Greece withdraws from Euro and runs on Bitcoin; April Fools Prank or Serious Possibility?

Jamal Bouoiyour () and Refk Selmi

MPRA Paper from University Library of Munich, Germany

Abstract: This paper assesses whether the way in which the Greek crisis was communicated by media and social networking increase the debt deal uncertainty and the possibility of abandoning the euro in favor of Bitcoin. Through an improved frequency approach, we attempt to disentangle short-, medium- and long-run causality between Google Trends (search queries) and Twitter (social media) data related to the Greek crisis and Bitcoin unconditionally and conditioning upon relevant control variables. Our results unambiguously show a short-run unidirectional causality running from search queries and the number of tweets to the use of Bitcoin. These findings remain meaningful when a number of control variables are accounted for, while the cycle length becomes shorter. These results change substantially by the arrival of the left-wing Syriza party in power, on January 25th, 2015, with its radical approach to debt negotiations. The cycle becomes longer (short- and medium-run). Not surprisingly, doubts have increased as to whether Athens can appropriately settle its debt repayment obligations. This study indicates that Greece’s withdrawal from euro and running on Bitcoin is likely to be an April fool’s joke rather than serious possibility. It also proves a sharp distinguishability among Googlers and Twitters.

Keywords: Greek crisis; Social media; Google Trends; Bitcoin; frequency domain causality. (search for similar items in EconPapers)
JEL-codes: E30 F34 G15 (search for similar items in EconPapers)
Date: 2015-06-27
New Economics Papers: this item is included in nep-eec and nep-mac
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Citations: View citations in EconPapers (3)

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