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Is the Greek debt sustainable? Analyzing three different scenarios for the forthcoming period 2018–2022

Author

Listed:
  • Economou Emmanouil M.L.
  • Kyriazis Nicholas

    (Department of Economics, University of Thessaly, Volos, Greece)

Abstract

In this paper, we attempt to estimate the development of the Greek public debt for the period 2018–2022. In order to achieve this, we analyze three different fiscal scenarios that are based on the official data available, together with our estimations that are based on a specific conceptual framework that we develop. The three scenarios are based on a different mixture of Gross domestic product (GDP) growth rates and budgetary surpluses of GDP. The analysis concludes that the numerical outcome is almost the same in all three case scenarios. However, the third scenario is the best since it leads to higher growth, GDP, and less austerity measures, and thus making public debt sustainable in the long run. The third scenario also provides the best combination of the trade-off between austerity and growth. We conclude by discussing some policy measures.

Suggested Citation

  • Economou Emmanouil M.L. & Kyriazis Nicholas, 2018. "Is the Greek debt sustainable? Analyzing three different scenarios for the forthcoming period 2018–2022," Journal for Markets and Ethics, Sciendo, vol. 6(2), pages 171-182, December.
    • Handle: RePEc:vrs:jmaeth:v:6:y:2018:i:2:p:171-182:n:1
    DOI: 10.2478/jome-2018-0036
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    References listed on IDEAS

    as
    1. George Alogoskoufis, 2013. "Macroeconomics and Politics in the Accumulation of Greece’s Debt: An econometric investigation, 1975-2009," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 68, Hellenic Observatory, LSE.
    2. Nikolaos Artavanis & Adair Morse & Margarita Tsoutsoura, 2016. "Measuring Income Tax Evasion Using Bank Credit: Evidence from Greece," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 739-798.
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    More about this item

    Keywords

    Greek Public Debt; Debt Development; Three Fiscal and Growth Policy Scenarios;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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