The Greek Debt Crisis: Likely Causes, Mechanics and Outcomes
By M. Arghyrou, J. Tsoukalas. Social Science Research Network, 2011
237 citations recorded by the source corpus.
We use insights from the literature on currency crises to offer an analytical treatment of the crisis in the market for Greek government bonds. We argue that the crisis itself and its escalating nature are very likely to be the result of: (i) steady deterioration of Greek macroeconomic fundamentals over 2001–09 to levels inconsistent with long-term EMU participation; and (ii) a double shift in markets’ expectations, from a regime of credible commitment to future EMU participation under an implicit EMU/German guarantee of Greek fiscal liabilities, to a regime of non-credible EMU commitment without fiscal guarantees, respectively occurring in November 2009 and February/March 2010. We argue that the risk of contagion to other periphery EMU countries is significant; and that without extensive structural reforms, the sustainability of the EMU is in question.
Subfields: Economics and Econometrics, Finance
View Paper: https://www.semanticscholar.org/paper/6dd1f3545a2042338249e28d2b33c0aa1e5b89b1
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In Economics and Econometrics
- Alexandros Kontonikas
- António Afonso
- M. Arghyrou
- Ricardo M. Sousa
- Candida Ferreira
- Pedro Gomes
- Gerry McNamara
- Paul M. Vaaler
In Finance
Citations in the corpus
- The EMU sovereign-debt crisis: Fundamentals, expectations and contagion (2012, methodology): “Section 3 discusses the theoretical framework by Arghyrou and Tsoukalas (2010) on which our empirical analysis is based.”
- The Determinants of Sovereign Bond Yield Spreads in the EMU (2012, methodology): “, 2011); changing private expectations regarding the probability of default risk and/or a country’s exit from the euro (Arghyrou and Tsoukalas, 2011), leading to a marked shift in market pricing behaviour from a ‘convergence-trade’ model”
- Economic Recession, Job Vulnerability, and Tourism Decision Making: A Qualitative Comparative Analysis (2017, unknown): “Since 2010 Greece has faced its worst and deepest financial crisis in modern history (Goumagias, Hristu-Varsakelis and Saraidaris, 2012; Papatheodorou and Arvanitis, 2014) causing cuts in wages, pensions and public expenditure (Argyrou and Tsoukalas, 2011).”