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Financialization and the Financial and Economic Crises: The Case of Greece

Author

Listed:
  • Yanis Varoufakis

    (National & Kapodistrian University of Athens)

  • Lefteris Tserkezis

    (National & Kapodistrian University of Athens)

Abstract

The present essay analyzes the changing relationship between the real and the financial sector in the course of the long-run development of the Greek economy, focusing on the effects of financialization and on its connection to the current economic crisis. The first section offers a brief discussion of the basic tendencies characterizing the long-run development of the Greek economy over the past three decades. The second section examines the effect of financialization on several aspects of the real economy, including income distribution, gross capital formation, consumption and the evolution of the current account. In the third section, the results of the preceding analysis are linked to the outbreak of the current crisis, in an attempt to explain the reasons behind this crisis’ excessive severity in the case of the Greek economy, while the fourth section concludes.

Suggested Citation

  • Yanis Varoufakis & Lefteris Tserkezis, 2014. "Financialization and the Financial and Economic Crises: The Case of Greece," FESSUD studies fstudy25, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
  • Handle: RePEc:fes:fstudy:fstudy25
    as

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    File URL: http://fessud.eu/wp-content/uploads/2012/08/FESSUD_studies-in-financial-systems_Greece_final_Study25.pdf
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    Citations

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    Cited by:

    1. Eckhard Hein, 2015. "Causes and Consequences of the Financial Crisis and the Implications for a More Resilient Financial and Economic System: Synthesis of FESSUD Work Package 3," Working papers wpaper128, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    2. Nina Dodig & Eckhard Hein & Daniel Detzer, 2016. "Financialisation and the financial and economic crises: theoretical framework and empirical analysis for 15 countries," Chapters,in: Financialisation and the Financial and Economic Crises, chapter 1, pages 1-41 Edward Elgar Publishing.
    3. Hein, Eckhard, 2016. "Causes and consequences of the financial crisis and the implications for a more resilient financial and economic system," IPE Working Papers 61/2016, Berlin School of Economics and Law, Institute for International Political Economy (IPE).

    More about this item

    Keywords

    capital flows; current account deficit; debt crisis; financialization; Greek economy; trade imbalances;

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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