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

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  • Belke, Ansgar
  • Gros, Daniel

Abstract

This paper reviews cases of successful price and wage adjustment, which are often regarded as constituting best practice, in Australia, Latvia and the German new states and contrasts them with the Greek experience under the Troika programmes. 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 programme. We find that the reaction of wages to unemployment in Greece under the programme was similar to that observed in Germany and Portugal (a case that 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 programme. But this cannot be proven beyond doubt.

Suggested Citation

  • Belke, Ansgar & Gros, Daniel, 2017. "Greece and the Troika – Lessons from international best practice cases of successful price (and wage) adjustment," CEPS Papers 12557, Centre for European Policy Studies.
    • Handle: RePEc:eps:cepswp:12557
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    Cited by:

    1. Ansgar Belke, 2020. "Depression and grief as a result of economic and financial crises: the example of Greece and some generalizations," Economic Change and Restructuring, Springer, vol. 53(1), pages 139-149, February.
    2. Daphne Nicolitsas, 2021. "The impact of regulations and institutions on competitiveness and productivity: the case of Greece," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 18(1), pages 23-47, June.
    3. Cyrille Lenoël & Corrado Macchiarelli & Garry Young, 2023. "Greece 2010–18: What Could Have Been Done Differently?," Open Economies Review, Springer, vol. 34(2), pages 281-315, April.

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    More about this item

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F49 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Other

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