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Structural Adjustment of the Greek Economy

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  • Katseli, Louka Tarsitsa

Abstract

This study analyses the likely pattern of structural adjustment of the Greek economy as economic integration proceeds, in light of the structural rigidities present in the commodity, capital and labour markets. The presence of such rigidities is attributed to `state corporatism', identified as the prevalent mode of economic and social organization characterized by an interlocking set of interests and entitlements across the state, financial institutions and traditional industry. The state-corporatist environment has condoned and fostered the development of dual markets and has given rise to allocative inefficiencies in their operations. Integration challenges the fundamentals of state corporatism through trade and capital market liberalization, through exposure of the official sector to external competition and through the requirements imposed by macroeconomic policy coordination. In the short run, unemployment is likely to rise as profitability in the traded-good sector declines. In the medium run, industrial restructuring and increased competition could produce efficiency gains. The policy challenge is to redress internal and external imbalances and at the same time implement a sustainable programme for development, where there is structural adjustment with growth.

Suggested Citation

  • Katseli, Louka Tarsitsa, 1990. "Structural Adjustment of the Greek Economy," CEPR Discussion Papers 374, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:374
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    Cited by:

    1. Győrffy, Dóra, 2014. "Válság és válságkezelés Görögországban. A puha költségvetési korlát szerepe a gazdasági összeomlásban [Crisis and crisis management in Greece. The role of soft budget constraints in the economic co," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 27-52.
    2. Misala, Józef, 1992. "The experience of the Mediterranean countries with accession to the European Communities: Lessons for Poland," Kiel Working Papers 511, Kiel Institute for the World Economy (IfW Kiel).
    3. Costas Milas, 2000. "Employment, output and political business cycle effects in the Greek non-tradable sector," Applied Economics, Taylor & Francis Journals, vol. 32(2), pages 123-133.
    4. Frank Barry, 2003. "Economic Integration and Convergence Processes in the EU Cohesion Countries," Journal of Common Market Studies, Wiley Blackwell, vol. 41(5), pages 897-921, December.
    5. Rovolis, Antonis & Spence, Nigel, 1999. "Public infrastructure capital, scale economies and returns to variety," ERSA conference papers ersa99pa077, European Regional Science Association.
    6. Milas, Costas, 1998. "Long-run structural estimation of labour market equations with an application to Greece1," Economic Modelling, Elsevier, vol. 16(1), pages 149-161, January.
    7. Milas, Costas & Otero, Jesus G., 1999. "Identification And Estimation Of A Labour Market Model For The Tradeables Sector: The Greek Case," Economic Research Papers 269250, University of Warwick - Department of Economics.
    8. Milas, Costas, 1999. "Labor Market Decisions and Greek Manufacturing Competitiveness," Journal of Policy Modeling, Elsevier, vol. 21(4), pages 505-513, July.
    9. Serge Rey, 2001. "Les taux de change bilatéraux adoptés pour l’entrée dans l’Euro sont-ils des taux d’équilibre? Une tentative de réponse à l’aide de la parité des pouvoirs d’achat et de la parité des coûts," Post-Print hal-01885323, HAL.

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