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Fiscal policy relaxation in a depressed economy-Can there be a “Free Lunch” for Greece?

Monokroussos, Platon, (2017), “Fiscal policy relaxation in a depressed economy-Can there be a “Free Lunch” for Greece?”, Eurobank Greece Macro Monitor, 12 July

This study leans on the literature on regime-dependent fiscal multipliers and the existence of hysteresis effects to demonstrate that, under certain conditions, a further relaxation of the agreed fiscal targets for Greece could not only benefit the country’s growth outlook, but might also lead to improved (rather than worsened) fiscal dynamics in the medium- and long-run.

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