NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Analytics of the Greek Crisis

Pierre-Olivier Gourinchas, Thomas Philippon, Dimitri Vayanos

Chapter in NBER book NBER Macroeconomics Annual 2016, Volume 31 (2017), Martin Eichenbaum and Jonathan A. Parker, editors (p. 1 - 81)
Conference held April 15-16, 2016
Published in May 2017 by University of Chicago Press
© 2017 by the National Bureau of Economic Research
in NBER Book Series NBER Macroeconomics Annual

We provide an empirical and theoretical analysis of the Greek Crisis of 2010. We first benchmark the crisis against all episodes of sudden stops, sovereign debt crises, and lending boom/busts in emerging and advanced economies since 1980. The decline in Greece’s output, especially investment, is deeper and more persistent than in almost any crisis on record over that period. We then propose a stylized macro-finance model to understand what happened. We find that a severe macroeconomic adjustment was inevitable given the size of the fiscal imbalance; yet a sizable share of the crisis was also the consequence of the sudden stop that started in late 2009. Our model suggests that the size of the initial macro/financial imbalances can account for much of the depth of the crisis. When we simulate an emerging market sudden stop with initial debt levels (government, private, and external) of an advanced economy, we obtain a Greek crisis. Finally, in recent years, the lack of recovery appears driven by elevated levels of non-performing loans and strong price rigidities in product markets.

This chapter is no longer available for free download, since the book has been published. To obtain a copy, you must buy the book.
Order from Amazon.com

Machine-readable bibliographic record - MARC, RIS, BibTeX

This chapter first appeared as NBER working paper w22370, The Analytics of the Greek Crisis, Pierre-Olivier Gourinchas, Thomas Philippon, Dimitri Vayanos
Commentary on this chapter:
  Comment, Olivier Blanchard
  Comment, Markus K. Brunnermeier
  Discussion,
Users who downloaded this chapter also downloaded* these:
Blanchard Comment on "The Analytics of the Greek Crisis"
Jordà, Schularick, and Taylor Macrofinancial History and the New Business Cycle Facts
Beaudry, Galizia, and Portier Is the Macroeconomy Locally Unstable and Why Should We Care?
Brunnermeier Comment on "The Analytics of the Greek Crisis"
Foged and Peri w19315 Immigrants' and Native Workers: New Analysis on Longitudinal Data
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us