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Why is the Greek economy collapsing? A simple tale of high multipliers and low exports

Alcidi, Cinzia  Gros, Daniel, (2012), ‘Why is the Greek economy collapsing? A simple tale of high multipliers and low exports’,, 21 December. In an attempt to understand why the Greek economy is collapsing, this Commentary points out two key aspects that are often overlooked – the country’s large multiplier and a bad export performance. When combined with the need for a large fiscal adjustment, these factors help explain how fiscal consolidation in …Read More

The probability of Greek exit, revisited

Jens Nordvig, (2012), ‘Τhe probability of Greek exit, revisited’,, 17 December. Fears of an imminent Greek exit from the Eurozone have subsided, for now. This column attempts to measure the probability of a Greek exit, finding that the changing fortunes of Greek political parties, and the possibility of an early election, mean that the risk of a Greek exit may actually be quite high. It suggests that, despite investors’ …Read More

Greece’s Bogus Debt Deal

Mody, Ashoka, (2012), ‘Greece’s Bogus Debt Deal’,, 14 December. The process of official forgiveness of Greek debt has begun. Referred to as “official sector involvement” (OSI), it includes several initiatives aimed at reducing Greece’s debt/GDP ratio to 124% in 2020, from roughly 200% today. Even as the deal was announced, however, newspaper reports suggested that officials recognized that the measures would be insufficient to meet the target; further negotiations …Read More

Why Greece is a Model of Economic Mismanagement

Yves Smith, (2012), ‘Why Greece is a Model of Economic Mismanagement’,, 21 November. I note that we still haven’t heard from the Euro group meeting about what the exact plan is for Greece. As I said, my expectations are that a ‘deal’ will be stitched together at the last minute to ‘kick the can’ further down the road because I can’t see northern creditors having the political will to …Read More

Macroeconomic Imbalance Scoreboard – A Visual Ranking Among 11 EZ Countries

Capone-Parisi, Elisa, (2012), ‘Macroeconomic Imbalance Scoreboard – A Visual Ranking Among 11 EZ Countries’,, 9 November. According to the EU Commission’s website, the Macroeconomic Imbalance Procedure (MIP) is a surveillance mechanism that aims to prevent and correct macroeconomic imbalances within the EU. It relies on an alert system that uses a scoreboard of indicators and in-depth country studies, strict rules in the form of a new Excessive Imbalance Procedure (EIP) …Read More

Greek haircuts and Greek myths — the detail

McDermott, John, (2011), ‘Greek haircuts and Greek myths — the detail’,, 22 October. European leaders on Friday received some interesting weekend reading.FT Alphaville has also taken a look at “Greece: Debt Sustainability Analysis”, an assessment prepared by European Commission economists for discussion on Friday among European finance ministers. We’ve put it in the usual place.

Argentina and Greece: More similarities than differences in the initial conditions

Kiguel, Miguel, (2011) ‘Argentina and Greece: More similarities than differences in the initial conditions’,, 17 August. A decade ago Argentina was in the midst of a severe economic crisis. This column argues that the episode offers lessons for the Eurozone today. Unless Greece takes major steps to improve its competitiveness and growth prospects, the country has little hope to get out of this crisis.

Who is Responsible for the Greek Tragedy?

El-Erian, Mohamed, (2012), ‘Who is Responsible for the Greek Tragedy?’,, 19 May. Greece is following the road taken by several other crisis-ridden emerging economies over the past 30 years. Indeed, as I argued earlier this year, there are stunning similarities between this once-proud eurozone member and Argentina prior to its default in 2001. With an equally traumatic implosion – economic, financial, political, and social – now taking place, we …Read More