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Anatomy of the Greek Depression with Firm-Level Data: The Importance of Demand Shocks

Author

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  • Stelios Giannoulakis
  • Plutarchos Sakellaris

Abstract

During the Greek Depression, which saw a 22 percent decline in output, young firms and small firms experienced significantly steeper declines in sales growth compared to their mature and larger counterparts. This disparity was largely driven by adverse demand shocks and was further intensified by financing constraints (FCs), with a significant interaction between these two factors amplifying the impact. Firm-level heterogeneity played a critical role in shaping macroeconomic outcomes, with the disproportionate impact on young firms and small firms accounting for approximately one-quarter of the total output decline during the crisis.

Suggested Citation

  • Stelios Giannoulakis & Plutarchos Sakellaris, 2026. "Anatomy of the Greek Depression with Firm-Level Data: The Importance of Demand Shocks," American Economic Journal: Macroeconomics, American Economic Association, vol. 18(1), pages 260-296, January.
    • Handle: RePEc:aea:aejmac:v:18:y:2026:i:1:p:260-96
    DOI: 10.1257/mac.20220125
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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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