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Institutional Changes in the Euro-Zone and the Greek Debt Crisis

Author

Listed:
  • Nicholas K. Tsounis

    (Technological Institute of Western Macedonia)

  • George Polychronopoulos

    (Technological Institute of Athens)

Abstract

This study attempts to quantify the effects of the implicit restrictive monetary policy, exercised by the European Central Bank (ECB) in Greece, during the world financial crisis. An autoregressive distributed lags (ARDL) testing approach is used to verify the existence of a long-run relationship between GDP, total money supply and government expenditure in the Greek economy from 2002 to 2013. The main findings suggest that the institutional settings of the ECB should allow the use of monetary policy during periods of monetary crisis. Money supply in the Greek economy is in a positive relationship to the GDP. If the institutional settings of the ECB were different, allowing money supply to remain stable during the crises, a significant portion of the GDP decline would have been averted.

Suggested Citation

  • Nicholas K. Tsounis & George Polychronopoulos, 2014. "Institutional Changes in the Euro-Zone and the Greek Debt Crisis," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 12(2), pages 145-166.
    • Handle: RePEc:seb:journl:v:12:y:2014:i:2:p:145-166
    as

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    File URL: http://www.asecu.gr/Seeje/issue23/issue23-tsounis-polychronopoulos.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Monetary policy; Euro-zone; External Debt; Greece;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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