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Δυναμική Του Χρέους, ‘Δίδυμα Ελλείμματα’ Και Διεθνής Ανταγωνιστικότητα Της Ελληνικής Οικονομίας
[Debt dynamics, ‘twin deficits’ and international competitiveness of the Greek economy]

Author

Listed:
  • Mariolis, Theodore
  • Papoulis, Κostas

Abstract

This paper explores the dynamics of the Greek public debt and its relationship with the ‘twin deficits’, that is, the public and current account deficits. By modeling the evolution of these variables and using actual data of the Greek economy, this paper shows that the public debt is unsustainable as the ‘twin deficits’ are expected to persist. The causa causans of this persistence is the erosion of the international competitiveness of the country. Under these circumstances, the contemplation of policies such as reduction in government expenditures and cuts in unit labour costs in the private sector seems to be the only available, although too little too late ‘remedy’.

Suggested Citation

  • Mariolis, Theodore & Papoulis, Κostas, 2010. "Δυναμική Του Χρέους, ‘Δίδυμα Ελλείμματα’ Και Διεθνής Ανταγωνιστικότητα Της Ελληνικής Οικονομίας
    [Debt dynamics, ‘twin deficits’ and international competitiveness of the Greek economy]
    ," MPRA Paper 23173, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:23173
    as

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    File URL: https://mpra.ub.uni-muenchen.de/23173/1/MPRA_paper_23173.pdf
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    References listed on IDEAS

    as
    1. Yilmaz Akyüz, 2007. "Debt Sustainability in Emerging Markets: A Critical Appraisal," Working Papers 61, United Nations, Department of Economics and Social Affairs.
    2. Harck, Soren, 2000. "On the Sustainability Area as a Simplifying Didactic Device," Cambridge Journal of Economics, Oxford University Press, vol. 24(4), pages 505-509, July.
    3. Matteo Formenti, 2008. "Indicators and Tests of Sustainability: The Italian Case," Rivista di Politica Economica, SIPI Spa, vol. 98(6), pages 123-160, November-.
    4. You, Jong-Il & Dutt, Amitava Krishna, 1996. "Government Debt, Income Distribution and Growth," Cambridge Journal of Economics, Oxford University Press, vol. 20(3), pages 335-351, May.
    5. Mariolis, Theodore, 2010. "A neo-Ricardian critique of the traditional static theory of trade, customs unions and common markets," MPRA Paper 23088, University Library of Munich, Germany.
    6. Brewer, Anthony, 1985. "Trade with fixed real wages and mobile capital," Journal of International Economics, Elsevier, vol. 18(1-2), pages 177-186, February.
    7. Mariolis, Theodore, 2006. "Distribution and Growth in a Multi-Sector Open Economy with Excess Capacity," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 59(1), pages 51-61.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Comparative-absolute advantage; debt dynamics; effective demand; European Monetary Union; Greek economy; international competitiveness; ‘twin deficits’;

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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