“Twin deficits” in Greece: in search of causality

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThe paper discusses the trajectories of the Greek public deficit and sovereign debt between 1980 and 2010 and its connection to the political and economic environment of the same period. We pay special attention to the causality between the public and the external deficit in the period after 1995, the post-Maastricht treaty period. We argue that, due to the European monetary unification process and the adoption of the common currency, causality ran from the external deficit to the public deficit. This hypothesis is tested econometrically using both Granger Causality and Cointegration analyses. We find empirical support for this hypothesis. and 2010 and its connection to the political and economic environment of the same period. We pay special attention to the causality between the public and the external deficit in the period after 1995, the post-Maastricht treaty period. We argue that, due to the European monetary unification process and the adoption of the common currency, causality ran from the external deficit to the public deficit. This hypothesis is tested econometrically using both Granger Causality and Cointegration analyses. We find empirical support for this hypothesis.

Choques externos e desequilíbrios financeiros: uma interpretação sobre a crise brasileira

“…Nesse sentido, os déficits governamentais causariam o déficit externo (Abell, 1990). Isso ocorreria por dois canais principais (Nikiforos et al, 2015). O primeiro canal sugere (baseando-se na teoria do Loanable Funds) que o aumento dos déficits públicos estimula a demanda, provocando uma situação em que o investimento doméstico supera a poupança doméstica.…”

Stock‐flow Consistent Macroeconomic Models: A Survey

“…8). In the case of the eurozone, many authors have argued that the high private and public deficits of the peripheral countries are simply the mirror image of the exogenous decrease of the current account balance due to the real exchange rate appreciation, the decrease in the transfers to these countries and the structural deficiencies of the eurozone (Arghyrou and Chortareas, 2008;Eichengreen, 2010;Chen et al, 2013;Flassbeck and Lapavitsas, 2013;Nikiforos et al, 2015;Kang and Shambaugh, 2016).…”

From the European Monetary Union to a euro–bancor: a stock–flow consistent assessment

“…These diagnoses reject the mainstream explanation of the crisis, which blames the allegedly profligate behaviour of southern countries. Taking the case of Greece as an example, Nikiforos et al (2015) have shown that the causality between the external to the fiscal deficit ran from the former to the latter, and not the other way around. According to these authors, 'the main source of the problem is to be found in the structural characteristics of the EMU ' (ibid.…”