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Speculative Attacks on the Drachma and the Changeover to the Euro

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Author Info

  • Tassos Anastasatos

    (Eurobank EFG)

  • Constantina Manou

    ()
    (Bank of Greece)

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    Abstract

    This article examines speculative attacks against the Greek drachma from 1960 until the adoption of the euro in 2001. The analysis is preceded by a historical review. Subsequently, using monthly data on a plethora of economic, financial and political variables, a range of Limited Dependent Variable Models (both binomial and multinomial) is estimated. This methodology allows devaluations to be differentiated from speculative pressure which was successfully repelled. Findings suggest that, until the early 1990s, speculative attacks were largely related to domestic macroeconomic imbalances. However, the effort to fulfill the Maastricht criteria disciplined policies. Thereafter, disturbances were more related to contagion from international crises due to increasing international interdependence.

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    File URL: http://eng.bankofgreece.gr/en/publications/pdf/econbull200810.pdf
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    Bibliographic Info

    Article provided by Bank of Greece, Economic Research Department in its journal Economic Bulletin.

    Volume (Year): (2008)
    Issue (Month): 31 (November)
    Pages: 49-77

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    Handle: RePEc:bog:econbl:y:2008:i:31:p:49-77

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    Web page: http://www.bankofgreece.gr
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    Related research

    Keywords: drachma; adoption of euro; speculative attacks;

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    References

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    Cited by:
    1. Zacharias Bragoudakis & Dimitrios Sideris, 2012. "Do retail gasoline prices adjust symmetrically to crude oil price changes? the case of the Greek oil market," Economic Bulletin, Bank of Greece, Economic Research Department, issue 37, pages 7-21, December.
    2. Petros M. Migiakis, 2012. "Reviewing the proposals for common bond issuances by the euro-area sovereign under a long-term perspective," Economic Bulletin, Bank of Greece, Economic Research Department, issue 37, pages 43-54, December.
    3. Costas N. Kanellopoulos, 2012. "The Size and structure of uninsured employment," Economic Bulletin, Bank of Greece, Economic Research Department, issue 37, pages 23-41, December.
    4. Stavarek, Daniel, 2010. "Determinants of the exchange market pressure in the euro-candidate countries," MPRA Paper 26933, University Library of Munich, Germany.
    5. Costas N. Kanellopoulos, 2012. "Employment and worker flows during the financial crisis," Economic Bulletin, Bank of Greece, Economic Research Department, issue 36, pages 31-41, April.

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