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Greece and the Troika – Lessons from international best practice cases of successful price (and wage) adjustment

Listed author(s):
  • Ansgar Belke
  • Daniel Gros

This paper reviews cases of successful price and wage adjustment, which are often regarded as constituting best practice, – Australia, Latvia and the German new states and contrasts them with the Greek experience under the Troika Programs. Latvia stands out as having had the quickest adjustment in wages. By contrast, before the crisis, Greek wages appeared to have been largely insensitive to labour market conditions but this changed with the program. We find that the reaction of wages to unemployment in Greece was under the program similar to that observed in Germany and Portugal (a case, which has attracted less attention). A priori it is likely that the change in wage behaviour in Greece was due to the labour market reforms imposed under the program. But this cannot be proven beyond doubt.

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File URL: http://www.rome-net.org/RePEc/rmn/wpaper/rome-wp-2017-07.pdf
File Function: First version, 2017
Download Restriction: no

Paper provided by ROME Network in its series ROME Working Papers with number 201707.

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Length: 23 pages
Date of creation: Jul 2017
Handle: RePEc:rmn:wpaper:201707
Contact details of provider: Web page: http://www.rome-net.org

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  2. Enev, Tihomir & Koford, Kenneth, 2000. "The Effect of Incomes Policies on Inflation in Bulgaria and Poland," Economic Change and Restructuring, Springer, vol. 33(3), pages 141-169.
  3. Gros, Daniel & Alcidi, Cinzia & Belke, Ansgar & Coutinho, Leonor & Giovannini, Alessandro, 2014. "Implementation of the Macroeconomic Adjustment Programmes in the Euro Area: State-of-Play," CEPS Papers 9017, Centre for European Policy Studies.
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  8. Gros, Daniel & Alcidi, Cinzia & Belke, Ansgar & Coutinho, Leonor & Giovannini, Alessandro, 2014. "State-of-play in implementing macroeconomic adjustment programmes in the euro area," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100407, Verein für Socialpolitik / German Economic Association.
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  16. Götz Zeddies, 2009. "Warum exportiert der Osten so wenig? Eine empirische Analyse der Exportaktivitäten deutscher Bundesländer," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 3(4), pages 241-264, December.
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